In the case of Board of Education of the City School District of New York v. Harris, 1979, the Supreme Court ruled on whether federal funds could be withheld from local educational agencies that were found to have racially discriminatory practices. The court held that Title VI and Title IV allowed for such action by federal authorities if a school district was found to be in violation. However, it also stated that before any funding could be withdrawn, there must first be an administrative hearing where evidence is presented and evaluated. This decision upheld provisions within Titles IV and VI which allow for termination or refusal of federal financial assistance upon determination (after opportunity for hearing) that a recipient has failed to comply with prescribed requirements aimed at preventing racial discrimination.

In the dissenting opinion for Board of Education of the City School District of New York v. Harris, Justice William Rehnquist argued that the majority's decision to uphold a federal statute prohibiting public schools from receiving federal financial assistance if they practiced racial discrimination was an overreach by Congress under its spending power. He contended that this ruling expanded Congressional authority beyond what is constitutionally permissible and intruded on states' rights to control their own educational systems. Furthermore, he believed there was no evidence showing that withholding funds would effectively combat segregation in schools or improve education quality for minority students. Therefore, he disagreed with the majority's interpretation of Title VI as allowing such broad enforcement measures against alleged discriminatory practices in federally funded programs.