An educational "'Marshall Plan' form the States," targeted to strengthen public schools and colleges at all levels and in every region of the country, is called for to prepare the American people for life in the 21st century. A number of social, political, economic and educational conditions, including the rising dropout and illiteracy rates, especially among minority groups, the rising poverty-stricken underclass, and the impending shortage of teachers, are cited as "storm signals." The effort that is called for includes the following requirements: (1) by 2001, the number of American adults with a college degree should go from 19% to 35%; (2) state colleges and universities must assume the leadership role in producing one million additional public school teachers needed during the next decade; and (3) state colleges and universities should direct academic resources and priorities toward cooperation with public schools and community colleges to reduce the high school dropout rate by 50% over 10 years. The report is presented in six chapters: "A Word to the American People,""Regarding Public Higher Education and Democratic Values,""Regarding Educational Opportunity in the United States,""Regarding Higher Education and Economic Development,""Regarding American Higher Education in an Interdependent World," and "A Word to State Colleges and Universities." Six appendices are provided: a list of the members of the Commission, a summary of conclusions and recommendations by chapter, background of the report, a listing of Commission staff, a summary of topics discussed at the regional seminars, and 23 references. A map foldout showing the locations of the nation's state colleges and universities is also provided. (KM)