THE CALIFORNIA MCATEER ACT AUTHORIZED THE ESTABLISHMENT OF A 2-YEAR PILOT PROJECT AIMED AT UNCOVERING METHODS OF ENCOURAGING CULTURALLY DISADVANTAGED CHILDREN TO REMAIN IN SCHOOL UNTIL GRADUATION. SELECTION OF 16,000 DISADVANTAGED STUDENTS FROM 24 SCHOOL DISTRICTS WAS BASED UPON THE STUDENT'S SOCIOECONOMIC BACKGROUND, HIS ACHIEVEMENT LEVEL, AND THE SCHOOL DISTRICT'S PLANS FOR IMPLEMENTING EXPERIMENTAL COMPENSATORY EDUCATION PROGRAMS. THE SUCCESSFUL COMPENSATORY PROGRAM DEVELOPS THE CULTURALLY AND SOCIOECONOMICALLY HANDICAPPED CHILD BY (1) DEMONSTRATING TO PUPILS A CLOSE RELATIONSHIP BETWEEN THE CLASSROOM AND LIFE, (2) PROVIDING REMEDIAL AND ENRICHMENT EXPERIENCES NECESSARY FOR ACADEMIC AND SOCIAL SUCCESS, AND (3) AROUSING ASPIRATIONS WHICH WILL ENABLE A PUPIL TO ESTABLISH CONSTRUCTIVE AND POSITIVE GOALS. APPROACHES UTILIZED ARE SMALL CLASSES, REMEDIAL INSTRUCTION, CLOSE TEACHER-PARENT COOPERATION, FLEXIBLE CLASS ARRANGEMENTS, STAFF ORIENTATION AND TRAINING, PRESCHOOL AND PARENT EDUCATION, EMPHASIS ON LANGUAGE SKILLS, TUTORIAL INSTRUCTION, AND EXTRA LIBRARY FACILITIES. INTERIM RESULTS OF VARIOUS PROGRAMS ARE DESCRIBED. (PS)