The State educational agency may—

(1) reduce or terminate funding for projects under this subpart if a local educational agency does not show progress in the number of children and youth attaining a regular high school diploma or its recognized equivalent; and

(2) require correctional facilities or institutions for neglected or delinquent children and youth to demonstrate, after receiving assistance under this subpart for 3 years, that there has been an increase in the number of children and youth returning to school, attaining a regular high school diploma or its recognized equivalent, or attaining employment after such children and youth are released.