A bill to amend the Education of the Handicapped Act to provide tutorial and related instructional services for homebound children through the employment of college students, particularly veterans and other students who themselves are handicapped.

Amends the Education of the Handicapped Act to authorize the Commissioner of Education to make grants to State educational agencies for the development and operation of tutorial and instructional programs, at the State and local level, for homebound handicapped children.

Requires a local educational agency, acting in cooperation with an institution of higher education, to submit a program proposal to the State educational agency. Requires that such proposal contain assurances that: (1) special consideration will be given to handicapped veterans and handicapped students in selecting tutors for such program; (2) the academic progress of participating students will not suffer; (3) compensation will be fixed by the local agency and cooperating educational institution within limits; (4) the Federal funds will be used to equip the handicapped child for assimilation by society; and (5) the Federal funds will be used to supplement and not supplant State, local, or private funds.

Directs the Commissioner to make grants based on the merits of the proposals submitted to him. Requires such proposals to contain: (1) all data submitted by the local agencies to the State; (2) the procedures that will be used by such State to evaluate the programs supported by Federal funds; and (3) detailed plans for the identification and locating of homebound handicapped children.

Provides that not more than ten percent of the Federal funds awarded to a State can be used for program administration expenses.

Authorizes appropriations for fiscal years 1982 through 1984.

Specifies that all sums shall be granted at the discretion of the Commissioner. Directs the Commissioner to set aside 25 percent of the total amount appropriated and to preliminarily allocate such amount to each State according to a stated formula.

Prohibits the Commissioner from disapproving a State's application without first making an offer of technical assistance to help bring that State's application up to passable standards.