School Dropout Retention and Recovery Act of 1987

School Dropout Retention and Recovery Act of 1987 - Amends the Elementary and Secondary Education Act of 1965 (ESEA) to add a new title, the Dropout Retention and Recovery Program.

Directs the Secretary of Education, from amounts appropriated to carry out this title for FY 1988 through 1990, to allocate grants to local educational agencies (LEAs) to establish and demonstrate: (1) model systems for collecting and reporting data on the incidence of and reasons for school dropouts; and (2) effective programs to identify potential dropouts and to encourage dropout reentry into the educational system.

Permits a State educational agency (SEA) to apply for a grant upon an agreement with a group of LEAs or request of an LEA that the State agency will apply on behalf of the local group or groups.

Directs the Secretary, from the amount allotted, to award as many grants as practicable to applicants who propose a program of sufficient size and scope to be of value as a demonstration. Limits the number of such grants an applicant may receive to one grant in each of three fiscal years.

Requires that the amount of such a grant to an LEA be proportionate to the extent and severity of the local dropout problem, but limits that amount to not more than 90 percent of project cost in the first fiscal year, 75 percent in the second, and 50 percent in the third.

Directs the Secretary, through the Office of Educational Research and Improvement, to conduct and disseminate the results of a study of the nature and extent of the school dropout problem in the United States. Sets forth requirements for such study, including the development of a model dropout information collection and reporting system and minimum reporting system requirements.

Requires each LEA (and, where appropriate, each SEA) to: (1) conduct a planning process with specified components relating to dropout prevention and reentry; and (2) develop a plan for the implementation of an appropriate project, including the establishment of an advisory council. Suggests provisions to be included in such an implementation plan.

Sets forth grant application requirements. Directs the Secretary, in considering applications for approval, to: (1) assure equitable distribution of such grants among U.S. regional areas; and (2) give priority to SEAs and LEAs with the most severe dropout problem whose applications show the greatest potential for success.

Sets forth authorized activities for which grants may be used, including: (1) career counseling services; (2) vocational education programs; (3) curriculum review and improvement; (4) collaboration with business, industry, and institutions to provide incentives for high-risk populations to remain in, or reenter, school; (5) addressing the relationships between drugs and dropouts and between youth gangs and dropouts in the interest of coordinating appropriate programs; and (6) evaluation and revision of program placement of students at risk.

Sets forth general provisions to govern this new title, including requirements for payment withholding, auditing, and grant supplementation of other funds. Requires the Secretary to submit an annual report to the Congress on January 1 concerning the activities assisted under this title.

Authorizes appropriations.