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. Stipulates that such proposal shall 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 as is necessary to support the finding request of such 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.

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

Authorizes the appropriation of such sums as are necessary for fiscal year 1980 through 1982 to carry out this Act.

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 allocate such amount to each State according to a stated formula.

Prohibits the Commissioner from disapproving a State's application unless an offer of technical assistance is first made to such State to help bring that State's application up to passable standards.