National officials sent a message to New York educators telling if they don't shape up they could lose millions of dollars in federal school aid.

New York won $696 million in federal aid last year for the federal Race to the Top competition, which is handed issued to the states for making major school reforms. Federal officials claim, that while New York State has made progress, it is failing to implement its reform plans and must do more.

New York made significant progress through Race to the Top over the last year but has recently hit a roadblock that not only impedes the Race to the Top but could threaten other key reform initiatives as well, U.S. Education Secretary Arne Duncan said in a statement. New York has a chance to be a national leader or a laggard and we are only interested in supporting real courage and bold leadership. Backtracking on reform commitments could cost the state hundreds of millions of dollars for improving New York schools.

State Education Commissioner John King and Regents Chancellor Merryl Tisch maintain that the state is making progress towards education reform, according to NY1.  

It's disappointing but not discouraging, King said according to local NBC Affiliate WPTZ. We have to get this done, and we will.

However, officials also point to bitter negotiations between unions and state education officials that are also putting them in danger from receiving the funds. New York City officials are having difficulty agreeing with teachers' and principals' unions on evaluation systems. The New York State United Teachers is suing over evaluations using student test performance, reported WPTZ.