This policy analysis focuses on identifying optimal federal fiscal policies for achieving desired programmatic and student outcomes on behalf of special populations in vocational education (i.e., disadvantaged, limited-English-proficient, and handicapped persons, and students interested in nontraditional careers). The present status of unserved special population students, enrollment patterns, and state and local funding suggests a critical need for the development and refinement of effective federal fiscal policy. A series of four major policy goals should be set; they include: improving access to programs and services, enhancing equity, stimulating program improvement, and strengthening interagency collaboration. In order to meet these goals, four major policy alternatives can be suggested: (1) direct federal grants to eligible recipients, (2) student incentive grants, (3) categorical state grants (setaside model) or (4) categorical state grants (separate title). Pupil-weighing formula and ability-to-pay factors are possible options for allocating funds within states. The most promising alternative for the short run appears to be the categorical state grant for vocational education; however, additional fiscal policy research that examines the full range of fiscal policy alternatives is needed. (KC)