State Superintendent of Public Instruction Tom Torlakson said U.S. Department of Education officials informed him last week that they were prepared to deny the state's waiver application, although the rejection has not yet been formally issued.
"I look forward to thoroughly examining the rationale the administration provides for its decision and will continue to explore every avenue for providing California's schools and students the relief they deserve," Torlakson said in a statement.
After missing two waiver deadlines, California in June submitted a last-minute, customized exemption from the Elementary and Secondary Education Act, or No Child Left Behind. The state said even though it did not comply with the specifics of some waiver requirements, it was adhering to them in principle.
U.S. education officials did not return a request for comment Wednesday.
The department has received a total of 47 waiver requests, and approvals have been issued to 33 states and the District of Columbia so far.
Under the law's key provision, schools must raise all students to proficiency levels in English-language arts and math by 2014.
If a waiver is not obtained and Congress does not revise the law, Torlakson has said that more than half of California's low-income schools would be labeled as "failing." That could lead to radical reforms such as state takeovers and charter conversions, and affect hundreds of millions of dollars in federal funding.
Critics have long charged that No Child Left Behind is too inflexible and relies too heavily on standardized test scores. The result has been that too many schools have been classified as failing, they say.
Last year, the Obama administration agreed to issue a two-year waiver for states that meet three main criteria: adoption of rigorous academic achievement standards, a program to focus on turning around low performing schools, and the most contentious provision, an accountability system involving test scores to evaluate teachers and principals.
But Torlakson said waivers should be granted without strings attached and said the requirements were too costly for a state mired in fiscal problems. State education officials estimated it would cost $2 billion to $2.7 billion to meet the waiver criteria.
The state has committed to the first requirement in the adoption of the national curriculum known as the Common Core State Standards, but the California Teachers Association, has steadfastly refused to agree to incorporate test scores as a measure of classroom performance.
Instead, California based its waiver application on its current measure of school achievement, called the Academic Performance Index, and several initiatives under way to boost teacher effectiveness.
"Taken together, these initiatives will provide California the opportunity to redesign the system of school accountability to ensure that it is more meaningful and more inclusive than the current federal accountability system," Torlakson wrote in a letter Friday to district superintendents.
School reformers said the waiver rejection shows that California is increasingly out of step with educational progress nationwide.
If the state had submitted an adequate application, low-income schools would also have gained flexibility in how they can use federal money, noted Erin Shaw, spokeswoman for Students First, a Sacramento-based reform group.
"This unfortunately comes at a time when school budgets remain tight and the `fiscal cliff' looms," Shaw said in a statement. "California has already left millions of badly needed federal dollars on the table by failing to submit competitive applications for `Race to the Top' funding. It's time to change the system that rejects accountability and continually risks classroom resources that rightfully belong to students."
The teachers association and Torlakson have said they are in favor of Congress rewriting the Elementary and Secondary Act to incorporate state policy differences and to give more flexibility.