This digest identifies seven essential elements of effective programs for students in alternative programs because they have dropped out, are at risk for dropping out, or have behavior disorders that require special education outside the general education setting. Such alternative programs offer flexible curricula that can address the unique social, behavioral, emotional, cognitive, and vocational needs of each student. The seven essential elements are: (1) functional assessment that identifies student strengths and skill deficits; (2) functional curriculum that meets the student's individual needs; (3) effective and efficient instruction aligned with functional assessment measures and the curriculum; (4) transition into and out of the alternative setting; (5) comprehensive systems that coordinate special education and treatment services; (6) appropriate staff, resources, and procedural protections for students with disabilities as required under the 1997 amendments to the Individuals with Disabilities Education Act; and (7) supportive climate in which students feel welcome, safe, and valued. (DB)