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Feds Will Release $51 Million to S.C. After Settlement of Special Education Dispute

Cross-posted from the State EdWatch blog

By Daarel Burnette II

The U.S. Department of Education has settled a years-long dispute with South Carolina education officials over spending cuts to the state's special education services, according to the Department of Education

The dispute began in 2011, at the height of the recession, when the U.S. Department of Education threatened to withhold in future years more than $112 million from South Carolina after its legislature between 2010-13 cut the amount of money it set aside for students with disabilities. 

A federal requirement, known as state maintenance of financial support, prohibits states from decreasing the amount of money they spend on students with special needs unless they get special permission from the department. South Carolina subsequently sued, arguing that the funding was cut unfairly. Congress later clarified in the spending law so that the department's cuts can't be permanent.  

The department returned some of that money in 2011 after the state managed to scrape together funds saved from low gas prices and better-than-expected tax collections in order to pay for special education services, according to the Associated Press. But at least $51 million in federal funds was being withheld from the state.   

On Thursday, the department agreed to release that $51 million to South Carolina districts to spend on students with disabilities. In exchange, the state will pay an extra $60 million to districts, money it withheld from districts during the recession. The state will receive more than $180 million from the federal government for special education this fiscal year, according to the AP.  

Read the full settlement here

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