34 CFR § 300.605 - Withholding funds.

---
identifier: "/us/cfr/t34/s300.605"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "34 CFR § 300.605 - Withholding funds."
title_number: 34
title_name: "Education"
section_number: "300.605"
section_name: "Withholding funds."
chapter_name: "OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES, DEPARTMENT OF EDUCATION"
part_number: "300"
part_name: "ASSISTANCE TO STATES FOR THE EDUCATION OF CHILDREN WITH DISABILITIES"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "20 U.S.C. 1221e-3, 1406, 1411-1419, and 3474; Pub. L. 111-256, 124 Stat. 2643; unless otherwise noted."
regulatory_source: "71 FR 46753, Aug. 14, 2006, unless otherwise noted."
cfr_part: "300"
---


# 300.605 Withholding funds.

(a) *Opportunity for hearing.* Prior to withholding any funds under Part B of the Act, the Secretary provides reasonable notice and an opportunity for a hearing to the SEA involved, pursuant to the procedures in §§ 300.180 through 300.183.

(b) *Suspension.* Pending the outcome of any hearing to withhold payments under paragraph (a) of this section, the Secretary may suspend payments to a recipient, suspend the authority of the recipient to obligate funds under Part B of the Act, or both, after the recipient has been given reasonable notice and an opportunity to show cause why future payments or authority to obligate funds under Part B of the Act should not be suspended.

(c) *Nature of withholding.* (1) If the Secretary determines that it is appropriate to withhold further payments under § 300.604(b)(2) or (c)(2), the Secretary may determine—

(i) That the withholding will be limited to programs or projects, or portions of programs or projects, that affected the Secretary's determination under § 300.603(b)(1); or

(ii) That the SEA must not make further payments under Part B of the Act to specified State agencies or LEAs that caused or were involved in the Secretary's determination under § 300.603(b)(1).

(2) Until the Secretary is satisfied that the condition that caused the initial withholding has been substantially rectified—

(i) Payments to the State under Part B of the Act must be withheld in whole or in part; and

(ii) Payments by the SEA under Part B of the Act must be limited to State agencies and LEAs whose actions did not cause or were not involved in the Secretary's determination under § 300.603(b)(1), as the case may be.

(Authority: 20 U.S.C. 1416(e)(4), (e)(6))