The current trend toward deregulation of education at the federal level will not prove particularly significant if deregulation does not also occur at the state level. The Reagan administration's handling of deregulation has been clumsy, slow, inappropriate, and apparently guided by motivations other than the easing of administrative burdens. These conclusions are drawn from an examination of the effects of the withdrawal of the Lau Regulations, the abortive effort to allow tax-exempt status to racially discriminating private schools, and the extensive budget cutting accompanying the consolidation of categorical grants into a block grant program in Chapter Two of the Education Consolidation and Improvement Act. Even successful federal deregulation would only affect 8 percent of educational funding, however, and tax reform efforts like Proposition Thirteen have assured that true control will revert to the states. The likelihood seems remote that significant changes will occur in pay rates, hiring practices, licensing requirements, or other regulated areas. The opportunity for local schools to compete more successfully for personnel or to provide higher quality services seems as a result to be unlikely to develop. Still, the imperatives of scarcity and the new federal role make deregulation at the state and local levels a simple necessity. (Author/PGD)