The issues surrounding minimum competency testing (MCT) and the handicapped are analyzed in light of federal mandates in P.L. 94-142, the Education for All Handicapped Children Act, for a free appropriate public education. Five policy approaches regarding graduation requirements are considered for positive and negative implications: the pass/fail approach; the certificate of attendance approach; the individualized education program approach; and the curricular approach (each curriculum having its own graduation requirements). The importance of flexibility in making and applying policy is emphasized. (CL)