The U.S. Department of Education has lifted a restriction on a $75 million federal grant that had raised doubts about Hawaii’s ability to improve low-performing public schools.

The four-year Race to the Top grant, which was awarded to the state Department of Education in August 2010, was placed on “high-risk” status in December 2011 because of unsatisfactory performance. The state risked losing the federal money but has made enough progress toward reform to have the restriction partially lifted in February and totally removed Monday.

The state has pledged to adopt more rigorous standards and assessments, improve data collection, groom quality principals and teachers, and turn around low-performing schools.

Stephen Schatz, the assistant superintendent of public schools who is overseeing the federal grant, said Hawaii’s unique structure of a single, statewide school system can make reform a challenge.

“When we reform our system, we’re not just talking about the policy level; we’re talking about every school and every classroom,” he said. “And so that was the promise of this reform for us: making a difference in all of our schools for all of our kids.

“We have a long ways to go to get to the place where all of our students are graduating ready for college. But we know we have a good plan and we have an ambitious agenda and we’re heading in the right direction.”

The state had the obstacle of implementing Race to the Top during a protracted contract fight with the Hawaii State Teachers Association. Teachers approved a new four-year contract in April that will eventually link pay raises to performance evaluations.

Principals agreed to performance evaluations in January, nine years after they had been required by a state education reform law.

Performance evaluations for teachers and principals that include student achievement were among the state’s promises in applying for the federal grant. Schatz said the contract dispute with teachers was “one of the main rocks in the middle of the road.”

Wil Okabe, president of the teachers union, said there is better collaboration among teachers, the department and the school board.

“We are working with the department at the table to try to look at education transformation and set the status for the rest of the country,” he said.

Okabe said teachers overwhelmingly ratified the contract after assurances that performance evaluations would be “fair and equitable for not only our members, but to address the concerns about education for our students.”

Hawaii had been passed over in the first round of Race to the Top grants, and it was a surprise to some educators that the state was selected for the second round of awards. Hawaii has long had a reputation for struggling public schools, and when it was first placed on high-risk status after failing to show significant progress, questions were raised about whether the state should have received the competitive grant.

But the U.S. Department of Education has since praised Hawaii’s performance and now considers the state in good standing. U.S. Secretary of Education Arne Duncan sent Gov. Neil Abercrombie a letter Monday documenting the improvement.

“The commitment made by the Hawaii State Department of Education to get to where it is today speaks for itself and I congratulate all of those involved for a job well done,” Abercrombie said in a statement. “It is clear that transformation in our education system is taking place at all levels from the Board of Education meeting room to the classroom.”

State Sen. Jill Tokuda (D, Kailua-Kaneohe), chairwoman of the Senate Education Committee, said the federal government’s decision to lift the restriction is validation of the state’s reform effort.

“This really is saying that the effort that we have been making is working. And the real key here is to continue that momentum and to make the effort sustainable beyond the grant program,” she said.