Recent evaluations of Federal compensatory education programs funded by the Elementary and Secondary Education Act of 1965, Title I, and maintained by the Education Consolidation and Improvement Act of 1981, Chapter 1, point to qualified effectiveness in the targeting of services, program structures, and classroom arrangements for increasing the academic achievement of educationally disadvantaged students. The poverty status of the school should be considered as the first criterion for targeting services and then students' achievement, although most districts further target resources to elementary school students. The smaller class size used in compensatory education classrooms has been strongly linked to increased achievement, but the effectiveness of the extended periods of compensatory instructional time are less certain. The homogeneous grouping employed in instructional groups is considered detrimental to low-ability students; cooperative learning techniques can be more effective. Evaluations of both Title I and Chapter 1 services demonstrate that the academic achievement of participants in Title I and Chapter 1 programs improved, but the gap between compensatory education students and regular students widened with grade level. Suggested policy changes in Chapter 1 include the following: (1) concentrate and sustain funding in fewer schools in the poorest neighborhoods; (2) permit school-based allocation of funding; and (3) incorporate services more fully into the overall instructional program and keep students in smaller regular classrooms. A list of 17 references is appended. (FMW)