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Secretary of Education Arne Duncan formally announced that 18 states and the District of Columbia were qualified for the second round of funding this afternoon, but the word was leaked early via the education press secretary's Twitter feed.

New York was one of 36 states competing for a share of $3.4 billion awarded to states for their education reform efforts.

The other finalist states are Arizona, California, Colorado, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Maryland, Massachusetts, New Jersey, North Carolina, Ohio, Pennsylvania, Rhode Island and South Carolina.

New York State was named a finalist for the first round of the competition in March, but ended up placing 15th out of the 16 finalists. Only the top two states won any money.

For the second, and final round, Education Secretary Arne Duncan has said 10 to 15 states may get the grant.

"As I have said many, many times before, this isn't just about the money. This is about working together and putting the needs of children ahead of everyone else," said Duncan.

New York applied for $700 million, and is in a better position to win after some last-minute legislative changes. In May, Albany raised the cap on the number of charter schools and allowed test scores to be used for teacher evaluations – two things the Obama administration says will win points in the competition.

State education officials will now go to Washington, D.C. for a final interview. Winners will be announced in late August or early September.