The problem of student abuse of drugs and alcohol demands immediate action at the state level to ensure the taking of suitable action at the local level. It is inappropriate for state agencies to refuse to act, to delegate full authority to local agencies, or to try to take an equivocal position; the most reasonable response appears to be to share with local districts the responsibility for formulating clear policies and programs. Developing policy concerning substance abuse is complicated by several serious factors that are not normally associated with educational policy: (1) the activities with which the policy is concerned are clearly illegal; (2) these activities can be life-threatening; (3) the problem is rooted in community conditions and mores; (4) policy opposing intrusion into students' family lives may have to be set aside; and (5) effective action may challenge students' rights and freedoms. One option that states should consider is providing guidance to local agencies concerning policy issues affecting prevention, detection, and treatment of substance abuse. States must also decide whether to make their policies mandatory, whether to assist local districts in policy development, and whether to fund staff training, curriculum development, and the creation of program evaluation methods. (PGD)