This paper explores the effect of 350 years of Dutch colonial rule upon Indonesian educational policies and the resulting regional inequalities in education. It was Dutch policy not to educate most of the children from the poorer social classes, but to use education to maintain and strengthen the existing social structure. Education was also used for economic exploitation. The author specifically examines the regions of North Sulawesi, West Sumatra, and East Java. North Sulawesi and West Sumatra gained an educational advantage because Christian and Islamic schools were located there, but in East Java, the center of Dutch aristocracy, there were very few schools. Over 75 percent of the entire population of East Java received no schooling at all. When Indonesia became an independent nation in 1945, the new government made an early commitment to equality of education. However, instead of eliminating regional disparities, government policies have increased them. Inequality has been perpetuated in school status, school type, and social class. Although there have been impressive enrollment gains and the social demands for education have increased, social justice in education is still hindered by the high cost of education. Among the author's suggestions for reform are equalization of school costs, provision of more scholarships, and implementation of a quota system for increasing the number of students from poor families attending secondary schools. The document contains numerous tables and diagrams, a glossary, bibliography, and appendices. (BC)