Federal regulators are holding North Carolina to tougher academic requirements that probably will force more public schools to face costly penalties for failing to meet No Child Left Behind goals.

The U.S. Education Department has rejected the state's requests not to count new reading exams this year for elementary and middle schools and to use a five-year graduation rate for high schools. This decision puts more schools at risk of being required to offer tutoring programs and to allow students to transfer elsewhere.

The State Board of Education will vote today on changes to comply with the federal decision.

School districts across North Carolina will be bracing for the consequences of this federal decision and the tougher tests. During the school year just ended, in Wake, the state's largest school district, eight schools were required to give students the right to transfer out. Nine others could be added on the basis of the most recent test results.

If a school doesn't pass because of the reading results, said Willi Webb, Wake's director of Title I services, families will be given an option to transfer out in January.

Under the federal No Child Left Behind program, schools must evaluate students in groups according to race, family income, English proficiency and other factors. If any group doesn't measure up on state reading and math tests, the entire school is considered deficient.

The wrinkle this year is that the state used new end-of-grade exams in reading. It's expected that the passing rates will be lower on the new exams. That's similar to what happened in 2006, when new math tests led to more students failing.

"We were looking good under the old standard," said Howard Lee, chairman of the State Board of Education. "I wouldn't be surprised to see a significant change with the new standards."

In April, the state board voted not to count the reading exams when calculating this year's teacher bonuses. At that same meeting, the board voted to ask the U.S. Education Department for permission not to use the reading results for this year.

State officials wanted to use only the math tests for elementary and middle schools for No Child Left Behind purposes.

Additionally, the state board asked for permission to use a five-year graduation rate instead of the four-year rate mandated under No Child Left Behind. High schools must improve their graduation rate annually.

But in the rejection letter, U.S. Education Assistant Secretary Kerri Briggs said leaving out the reading exams could lead to students' not getting needed help.

Briggs said the request to use a five-year graduation rate was rejected because that's not the standard amount of time for the vast majority of high school students to obtain a diploma.

Parents will find out July 21 whether elementary and middle schools met the math requirements on exams this year. It will be harder now, because the state raised the minimum passing rate from 65.8 percent last year to 77.2 percent this year.

It will be October before parents find out how their children's schools fared under the reading requirements.

Without the reading results, schools used other data to decide whether to promote students at the end of the school year.

"Our impression is that principals and teachers have made reasonable promotion decisions," said David Holdzkom, Wake County's assistant superintendent for evaluation and research.

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