Ed chief: NC sets tone for improving schools

"I'm just a huge fan of what's going on in North Carolina," Duncan said Monday during a WRAL News visit to the White House. "I think North Carolina is leading the country in where we need to go, and they're taking all my money, which is a great thing."

North Carolina secured $400 million in federal Race to the Top grants in 2010 and won $70 million in early childhood education funding last December.

Federal funding accounts for about 16 percent of the budget for North Carolina public schools, even with the loss of stimulus funds this year.

"As a country, we need to educate our way to a better economy, and we want to continue to invest very heavily in North Carolina because we think the state gets how fundamentally important this is," Duncan said.

North Carolina is one of several states granted a waiver from the federal No Child Left Behind rules. Duncan said he wants states to keep themselves accountable by setting a high bar for standards while also having flexibility with scarce resources.

State Superintendent of Public Instruction June Atkinson said the waiver will help North Carolina close achievement gaps. Even with cuts to school spending in recent years, she said, the state's graduation rate has gone up 10 percentage points in the last five years and is now at record levels.

Duncan said he has noticed the improvement, and he praised the state's innovation.

"I always think the best ideas in education come at the local level, not from me, frankly, or anyone else in Washington," he said. "It comes from great teachers, principals, superintendents and parents and students themselves."

Looming federal spending cuts to education could have a huge impact in North Carolina, however. Career tech education, child nutrition and aid to students in poorer counties could be wiped out by the budget cuts.

"It really would play havoc with our school districts, especially since they are dealing with fewer resources than they have had in recent years," Atkinson said.

"It's my fervent hope we won't get to that point," Duncan said. "It would potentially lead to massive cuts in Pell grants, massive cuts in K-12 reform and, in a time when we have to get better faster than ever before, we can't afford to take a step backward."