School Finance Act of 1981

School Finance Act of 1981 - Title I: Basic Grants - Provides supplemental financial assistance to the States and local educational agencies to assure an elementary and secondary education program of high quality.

Entitles a local educational agency to a basic grant of $100 for every child in average daily membership in elementary and secondary schools in the school district of such agency, reduced by the percentage that its non-Federal per pupil expenditures exceeds 115 percent of the State average per pupil expenditure. Makes provisions for entitlement to grants to Puerto Rico, Guam, American Samoa, the Virgin Islands, and the Trust Territory of the Pacific Islands. Directs the Secretary of Education to make such grants under this title from sums appropriated for fiscal years 1981 through 1986.

Requires a local educational agency desiring such grant to submit to the appropriate State educational agency an application which contains: (1) an assessment of the educational needs of its children and plans for meeting those needs with funds provided under this title; and (2) an assurance that the agency will provide nonideological services to private school students, that the control of funds shall be in a public agency, and that the funds provided shall be used to increase the level of funds that would be made available from non-Federal sources for the education of pupils participating in programs assisted under this title.

Requires State application assurances and periodic reports.

Limits the amounts of such payments to States in any fiscal year. Provides for reductions where necessitated by insufficient appropriations.

Title II: General Provisions - Conditions the authorization of appropriations to carry out this Act for any fiscal year upon the appropriation of at least $4,000,000,000 for the Financial Assistance to Meet Special Educational Needs of Children program under title I of the Elementary and Secondary Education Act.

Provides for a suspension of payments to a State for reasons of noncompliance.

Authorizes, in specified circumstances, the Secretary to arrange for the provision of services under this Act to nonprofit private school children.

Permits judicial review by a State of the Secretary's final action on its plan or suspension of its funds.