Muncie Schools are having severe budget problems.
To help cut the shortfall, Muncie schools proposed dropping bus service.
The district provides bus service for more than 4,000 K-12 students.
The Indiana Department of Education has denied the Muncie Community Schools' request to end student bus service.
Indiana law requires a district to provide three-year notice before ending bus service but the district applied for a waiver in June.
Voters in November rejected a property tax increase that would have provided $3.3 million for bus service.