Dropout Prevention and Reentry Act of 1985

Dropout Prevention and Reentry Act of 1985 - Amends the Elementary and Secondary Education Act of 1965 (ESEA) to add a new title X, the Dropout Prevention and Reentry Act of 1985. (Redesignates the current title X as title XI.)

Authorizes appropriations for FY 1987 through 1990 for such new title X.

Directs the Secretary of Education, from such title X funds for any fiscal year, to allot 20 percent to each of five categories of local educational agencies (LEAs) (based on total elementary and secondary school student enrollments).

Directs the Secretary, from the amounts allotted to such categories of LEAs, to award as many grants as practicable within each such category to LEAs whose applications: (1) have been approved; and (2) propose a program of sufficient size and scope to be of value as a demonstration. Limits an LEA to no more than one such grant in each of three fiscal years. Requires the amount of a grant to be, to the extent practicable, proportionate to the extent and severity of the local dropout problem. Limits the amount of a grant to 90 percent of the total cost of a project during its first fiscal year, 80 percent in the second, and 70 percent in the third.

Sets forth grant application requirements (including plans for addressing the needs of pregnant minors and school-age parents). Directs the Secretary to give first priority within each category of LEA to applicants with either very high numbers or very high percentages of school dropouts. Sets forth requirements for review of LEA second or third year projects.

Requires such grants to be used to carry out plans set forth in the applications. Lists activities such grants may also be used for (including counseling, remedial education, work-study, community-organization service, curriculum review, and school staff training).

Requires at least 30 percent of each grant to be used for dropout prevention activities, and another 30 percent for dropout reentry activities (i.e. persuading dropouts to return to school and assisting former dropouts with specialized services once they return to school).

Directs the Secretary, from amounts appropriated for FY 1986, to use a specified limited amount to conduct a one-year study of the nature and extent of the dropout program. Sets forth requirements for such study (including development of a model dropout information collection and reporting system and minimum reporting system requirements).

Sets forth general provisions for title X, including provisions relating to withholding payments, annual reports, and audits. Requires that title X grants supplement other funds.