An investigation of the interrelationships and functioning of federal programs aiding the education of handicapped children and an evaluation of possible program improvement is presented. An introductory section discusses the purpose and scope of the study, the approach used, and information sources. Section 2 provides a general discussion of alternative federal roles and functions, along with the rationales for each alternative. In Section 3 a discussion of each federal program and its role is presented, including such programs as Head Start, Centers and Services for the Deaf/Blind, and Regional Postsecondary Education. The final section examines policy options for making improvements in the federal programs. Among suggestions are an increase in educational legislation (e.g., P.L. 94-142, the Education for All Handicapped Children Act) funding; consolidation of certain federal demonstration projects; and a shift in the emphasis of the federal special education Personnel Preparation program toward inservice training. (PHR)