One purpose of this paper is to suggest appropriate policy options for investment in education. While the discussion of issues and options is based on the research literature, field observations, and interviews, this is not a review of the state of the art. It is an attempt to define and focus the debate on investment choices. Section 1 of the paper reviews a systems approach to learning, related theories, and data. Section 2 explores the range of features of education systems (objectives, investment, internal efficiency, benefits and return on investment, employment, income distribution, and other features). Section 3 discusses the major issues in formal education (the resource constraint, ineffectiveness, inefficiency, inequality, and reform). Section 4 treats approaches to educational reform and strategy options. There are two phases in changes--awareness and transition (the nature of the demand of skilled manpower, the over/under supply of skilled manpower, the effect of past educational investment on social equity, and the resources required for transitions) and reorganization of learning (motivation for reform, information for reform, technological and legal changes, and resources for reform). (Author/IRT)