Recent block grant legislation requires both state and local education agencies to provide private school students a range of services equivalent to that provided public school students. These requirements pose administrative and operational problems for state agencies, since these agencies must simultaneously avoid relationships with religiously oriented schools that would involve constitutionally prohibited degrees of government "entanglement" with religion. While entanglement issues may be easy for state agencies to avoid in the course of adopting some policies for providing services to private schools--policies involving dual enrollment, personnel sharing, and the provision of technical assistance or instructional services--other policies must be drawn up very carefully to avoid the entanglement problem. These difficult policy areas include the provision of instructional materials and the imposition of planning and reporting requirements. The few hints at policy guidelines offered in Supreme Court decisions seem to encourage requiring only simple and infrequent reports on planning and finances, and using the neutral grounds of the public school for program operations as much as possible. (Author/PGD)