The Carter administration told New York City's school system yesterday that it would cut off its federal funds unless the schools end alleged discrimination against minority and handicapped students.
But the Department of Health, Education and Welfare made clear in a letter to Irving Anker, chancellor of the New York City Board of Education, that it believes negotiations over the issue are going well and therefore will not defer new federal funding "at this time."
One HEW official estimated that New York schools receive about $200 million a year from Washington.
Wilbert (Gus) Cheatham, acting director of HEW's Office for Civil Rights, said he was referring the matter to the department's general counsel, who is expected in the next day or so to call for hearings before an administrative law judge on whether federal funds should be cut off.
Cheatham's letter did not detail the alleged discrimination, but an HEW official noted that the charges had been outlined in notices to New York by the Ford administration in 1976 and by the Carter administration last Oct. 4 and on Jan. 24 of this year.
According to those notices, city school officials were placing students in racially isolated classrooms, failing to deal with the English language problems of Hispanics, suspending and otherwise disciplining blacks and Hispanics to a greater degree than whites, failing to place handicapped students promptly in classes that would help them and denying them the opportunity to attend school for a full day.
The government's action came as a result of a settlement between HEW and civil rights groups of lawsuits charging that the department had not been enforcing federal laws that prohibit discrimination against the handicapped and that say federal funds cannot go to programs that discriminate by race or sex.