Abstract: Policies and strategies of poverty reduction and sustainable rural development take education as one of key instrument. Governments together with development partners are committed and implementing the strategies to meet the target goals set to education. For this study, pertinent articles and reports on critical issues of education in rural development are reviewed. Despite effort to improve access, equity and quality of basic education in rural areas, they still remain problematic. Skill training with complementary inputs is more important but in rural areas it is inadequate or no access. Some potential opportunities of basic education are lost. To break poverty in rural areas expansion of basic education is not enough by itself. Rather it can be incentive to exist rural and cause more socio-economic chaos in urban. In developing countries, achieving MDGs within intended year seems not feasible. Strengthen the efforts to improve quality, access and equitability of basic education in rural areas. Moreover, in rural development strategies, more attention to skill training, complementary inputs and to the potential contribution of higher institutions is needed. Further strengthening financial and technical support is necessary.