34 C.F.R. § 76.658 – Funds not to benefit a private school.

(a) A subgrantee may not use program funds to finance the existing level of instruction in a private school or to otherwise benefit the private school.
(b) The subgrantee shall use program funds to meet the specific needs of students enrolled in private schools, rather than:
1. (1) The needs of a private school; or
2. (2) The general needs of the students enrolled in a private school.
  (Authority: 20 U.S.C. 1221e-3 and 3474)