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Delaware and Tennessee school systems will receive hundreds of millions in Recovery Act funds after placing highly in "Race to the Top," the Obama administration's competition for education grants.

"These states received the two highest scores in the competition," Education Secretary Arne Duncan said during a conference call with reporters Monday. "They have written and passed new laws to support their policies and they have demonstrated the courage, capacity and commitment to turn their ideas into practices that can improve outcomes for students."

Delaware is slated to receive a grant for $100 million and Tennessee will receive $500 million. The two are the only states to receive funds after 40 states initially applied. 16 states qualified as finalists.

The competition is a two phase process. According to Duncan, $3.4 billion in grants will be awarded in the second round and states that did not make the initial cut will be allowed to re-apply.