This report assesses the societal costs of substance abuse--especially cocaine and crack addition--and dropping out of school. It is organized around three themes: (1) the impact of cocaine and crack abuse in terms of crime, public spending, and lost productivity; (2) policies that move addicts away from crack; and (3) policies that reduce the high school dropout rate. Based on extant literature, the report quantifies a bottom-line cost of drug abuse to have been between $60.4 billion and $124.9 billion in 1988, a figure that reflects the costs of health care, economic loss, and law enforcement relating to substance abuse. Impact also is assessed in terms of private and social issues. In evaluating the success of policies that have effectively moved addicts away from drugs, important questions concerning criteria for success, motivation for drug use, and addiction are explored. Law enforcement, treatment, educational, and prevention policies are evaluated. The current literature on testing, outpatient treatment, and peer programs to reduce the motivation toward drug abuse and to move addicts away from cocaine and crack is reviewed. In response to the issue of dropout prevention, the report recommends a rethinking of the structure of high schools within a collaborative context involving parents, schools, and communities. Included in the report are a working bibliography and a community service booklet that deals with the issues of this report on a local community level. (NB)