After the breakup of the Soviet Union, reforms of Russia's educational system included rapid decentralization of responsibilities to the regions, but without commensurate transfer of resources or clarification of government roles and responsibilities. Problems were greatly worsened by the severe fiscal stringency of the 1990s. This paper examines educational trends across the 89 Russian regions, analyzes current problems, and discusses policy options. Case studies of Samara and Novgorod Viliki regions include a look at special problems of rural schools. Four major issues in Russian education are identified: resource mobilization and efficiency, educational quality and its assessment, market relevance, and equity and access. Findings reveal that the number of teachers has been growing three times as fast as student enrollments, but both teachers and administrators face a set of adverse incentives and frequently lack essential resources such as textbooks. The educational system, especially vocational education, is poorly equipped to respond to rapidly changing market incentives. Resource shortages are having a particularly severe effect in poorer regions so that decentralization is worsening interregional inequalities, while within regions, rural schools and those for minority and special populations seem especially hard hit. Policy recommendations focus on increasing school autonomy, school financing mechanisms, increasing class size, teacher pay and working conditions, merging small rural schools, teacher education, educational assessment, market linkages, and equity issues. Appendices include a matrix of policy options, financial data, educational statistics, and the case studies. (Contains 15 references, 32 data tables, and 13 figures.) (SV)