In Iowa the number of handicapped school students is increasing even as total enrollments decline, probably because slow learners are being reclassified as "mildly handicapped" to make them eligible for special education funds and programs. As a result there may soon be more handicapped students than the state can afford. To avoid this, it is proposed that primary responsibility for mildly handicapped programs be given to regular school administrators, instead of to special education directors and staff, and that the continued identification of slow learners as mildly handicapped be discouraged. Present due process requirements in federal and state laws governing the identification of handicapped students are far too costly. The labeling process is expensive and time-consuming. Local school administrators should have more autonomy in identifying mildly handicapped students, and some rules for identifying the mildly handicapped should be relaxed, as the Illinois State Board of Education is considering doing. Responsibility should be gradually shifted to the local education agency (LEA) and the school building administrator for identifying and developing programs for mildly handicapped students. Further, simplified funding programs for the mildly handicapped should be available to LEAs. (Author/RW)