The second of four final reports from the Department of Education's School Finance Project presents information relevant to the subject of federal financial support to private school students and parents. An executive summary is followed by the introduction and the organizational outline of the report. Chapter 2 draws on information from existing data collections and surveys to provide a synthesis of the current literature on trends in private school enrollments and costs, state relationships with private schools, and federal assistance for private school children. Chapter 3 identifies and describes the major aid proposals considered in recent years and reviews important arguments on both sides of the issue of aid for families with children in private schools. Chapter 4 presents the results of a survey of approximately 1,200 households with school-age children on factors associated with current parental choice of public and private schools. Chapter 5 examines the experiences of British Columbia, Australia, and the Netherlands in financing private education and explains how the experiences of these countries are relevant to U.S. policymakers. A bibliography and appendixes on the methodology and related concerns of the household survey conclude the report. (MLF)