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U.S. Department of Education: Promoting Educational Excellence for all Americans
Regulations: Part 300 / C / 300.230 / c

(c) Education activities. If an SEA exercises the authority under paragraph (a) of this section, the agency must use funds from State sources, in an amount equal to the amount of the reduction under paragraph (a) of this section, to support activities authorized under the ESEA, or to support need-based student or teacher higher education programs.