Steve Rager, a teacher at Southport High School in Indianapolis, Indiana, had an affair with Heather Smith, then a senior at South-port, Heather sued Rager, the Metropolitan School District Perry Township, the Board of Metropolitan School District Perry Township, and the principal and assistant principal of Southport High School for,, among other things, violating Title IX’s prohibition against sex discrimination. The defendants unsuccessfully moved for summary judgment. We granted defendants permission to file an interlocutory appeal from that denial, and now reverse.
BACKGROUND
The following undisputed facts serve as background to this appeal. Heather Smith (Smith) was born on August 23, 1973. She first met defendant Steve Rager when she was a freshman at Southport High School. Rager taught physical education at Southport and also coached the boys’ swim team. Smith was a member of the girls’ swim team and often saw Rager at Southport’s .swim meets. Rager was also a friend of Smith’s parents.
The summer following her freshman year, Rager coached Smith through a community summer swimming program. Smith’s acquaintance with Rager continued during her sophomore and junior years at Southport and through her participation in the summer swimming program. Up to the summer before her senior year, Smith regarded Rager merely as her coach. But by her third year in the summer program, Smith came to regard Rager as “a very good friend” and “someone she could go to and talk.”
The following school year (1990-91) was 17-year-old Smith’s senior year. On the first day of classes Rager asked Smith to become his student assistant during her study hall period. Students at Southport had the option of serving as assistants to teachers during study hall, and approximately ten percent of the student body participated in this program. Student assistants usually typed, filed, or ran errands for the teacher. Smith obtained permission to become Rager’s student assistant and Rager cleared it with William Pickard, an assistant principal. Beginning in March of 1991, Smith also worked for Rager outside of school at his scuba shop.
In September 1990, shortly after Smith began as Rager’s student assistant, Rager made his first sexual advance on Smith: Rager asked Smith if, he. could give her a kiss, to which she responded with surprised silence. He then said, “You thought I was meaning the real thing,” and handed her a Hershe/s Kiss. He then said, “You wanted *1017the real thing, didn’t you?” and kissed her. Smith kissed Rager back. This occurred in his office in the school building during the class period in which Smith was assigned as Rager’s student assistant.
Over the ensuing weeks, the kissing continued. Rager also began to put his hand up Smith’s skirt. Near the end of September, Rager took Smith into his office bathroom and they had sexual intercourse. On subsequent occasions, they had sex in the bathroom and in a “hospitality room” under the bleachers. Throughout the school year, Rag-er and Smith had sex about twice a week, always (except for two occasions) on school premises. Rager did not force himself on Smith and she did not resist his advances or tell him “no,” except with respect to oral sex, although she later complied with Rager’s initiations. Smith enjoyed the sexual relationship and found that she now trusted Rager more than ever. Rager told Smith that he loved her and Smith responded in kind. Smith told no one about the sexual relationship with Rager until it was over and no one ever saw them having sex together. During the school year, Rager and Smith concealed the relationship by engaging in sex quietly in locations where they would not be observed.
As time passed, Smith began to feel confused and disturbed. She was afraid to tell Rager “no” and worried that if she told her parents they would be disappointed. She also worried that she might get in trouble if she told school officials. She decided that while she would rather not engage in sex, in order to maintain the relationship and keep Rager happy, she- would have to continue to do so. In January 1991, Smith questioned Rager for the first time about discontinuing the sex. On that and later occasions, she asked him whether he would understand and remain her friend if they stopped having sex. Rager said he would. Smith nonetheless continued to have sex with Rager. In fact, their sexual relationship continued after Smith graduated from Southport High School. Finally, on July 12,1991, Smith told Rager that she wanted to stop. He asked her for “one last time,” and she agreed. After that, they engaged in sex once more on July 18,1991. There are other sordid details that occurred during the relationship, but because they add nothing to the legal analysis at issue in this ease, and only serve to further embarrass Smith, we need not elaborate.
On July 28, 1991, Smith told a male friend (whom she later dated and then married) about her relationship with Rager. The next day, at her friend’s urging, she told her parents about her sexual relationship with Rager. She and her parents then reported it to the sheriffs office and school officials. Two days later, school officials suspended Rager and advised him that if he did not resign he would be fired and lose his teaching license. Rager resigned the following day. The school district then sent a letter to the State Board of Education recommending that Rager’s teaching license be revoked.
Almost two years later, in May 1993, Smith and her parents filed a multi-count complaint against the Metropolitan School District Perry Township (“School District”), the Board of Metropolitan School District Perry Township (“School Board”), Lloyd Bodie, the principal of Southport High, Larry Hensley-Mars-hand, the assistant principal of Southport High School, and Rager. (Other defendants were originally named, but later voluntarily dismissed.) In Count I, Smith alleged a claim of sex discrimination under Title IX against the School District, School Board, Bodie and HensleyMarshand. Count II was brought by both Smith and.her parents under 42 U.S.C. § 1983 and alleged claims against the School District, School Board, Bodie and Hensley-Marshand and Rager for various alleged constitutional violations. Count III was a state law negligence claim brought against the School District, School Board, Bodie, HensleyMarshand and Rager. Counts IV and V- were state law claims against Rager for intentional infliction of emotional distress and seduction.
The School District, School Board, Bodie, and Hensley-Marshand moved for summary judgment. (Rager did not join in the motion for summary judgment and is not a party on appeal.) The district court granted their motion on the § 1983 claim alleged in Count II, but denied summary judgment on the Title IX claim alleged in Count I and the *1018negligence claim alleged in Count III. The School District, School Board, Bodie and Hensley-Marshand requested the district court to certify for interlocutory appeal under 28 U.S.C. § 1292(b) the question of liability under Title IX. The district court did so, and we accepted the interlocutory appeal.
ANALYSIS
Title IX provides that “[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance____” 20 U.S.C. § 1681(a). In Cannon v. University of Chicago, 441 U.S. 677, 717, 99 S.Ct. 1946, 1968, 60 L.Ed.2d 560 (1979), the Supreme Court held that Title IX implicitly provides a private right of action for sex discrimination. Smith brought such a private action here, alleging sexual harassment by Rager and naming as defendants the School District, the School Board, the principal and assistant principal of Southport High School.
I. Appropriate Defendants Under Title IX
Although the district court did not address the issue, this case presents an initial question concerning the appropriate defendant in a Title IX action. Because Smith’s lawsuit sought recovery against the principal and assistant principal of Southport High School, in both their official and individual capacities, before we consider the propriety of the district court’s ruling on the summary judgment motion, we must determine whether a claim under Title IX can be stated against such defendants.
First we consider the language of Title IX: “[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.” By its terms, Title IX prohibits discrimination only by a “program or activity” receiving federal funding. Accordingly, in Lipsett v. University of Puerto Rico, 864 F.2d 881, 884, 901 (1st Cir.1988), the First Circuit concluded that a claim could not be established under Title IX against a supervisory official, either individually or officially, since “[i]n implying a cause of action under Title IX, the Supreme Court has considered only actions against the educational institution itself.” Id. (citing Cannon, 441 U.S. 677, 99 S.Ct. 1946). Id. (“[T]he separate liability of the supervisory officials at the University must be established, if at all, under § 1983, rather than under Title IX.”). See Lillard v. Shelby County Bd. of Educ., 76 F.3d 716, 730 (6th Cir.1996) (Nelson, J., concurring) (“I do not believe that Title IX can appropriately be read as subjecting anyone other than educational institutions to liability for violation of its terms.”). Cf. Rowinsky v. Bryan Indep. Sch. Dist., 80 F.3d 1006, 1012 (5th Cir.1996) (rejecting student-on-student sexual harassment claim because Title IX prohibits only discrimination by the grant recipient).
The majority of courts considering this issue also has concluded that only a grant recipient can violate Title IX. Burrow By and Through Burrow v. Postville Comm. Sch. Dist., 929 F.Supp. 1193, 1207 (N.D.Iowa 1996) (“The majority of lower courts explicitly addressing this issue have held that a damage remedy under Title IX is only available against an ‘education program or activity receiving Federal financial assistance,’ not individuals.”) (quoting Lillard, 76 F.3d at 730); Nelson v. Temple University, 920 F.Supp. 633, 638 (E.D.Pa.1996) (holding that a plaintiff cannot maintain a Title IX cause of action against an individual); Clay v. Board of Trustees of Neosho County Community College, 905 F.Supp. 1488, 1495 (D.Kan.1995) (“Title IX actions may only be brought against an educational institution, not an individual acting as an administrator or employee for the institution”); Bowers v. Baylor Univ., 862 F.Supp. 142, 145-46 (W.D.Tex. 1994) (dismissing Title IX claim against administrators and employees of educational institutions which were separately incorporated because they “do not constitute educational institutions in and of themselves”); Doe v. Petaluma City Sch. Dist., 830 F.Supp. 1560, 1576 (N.D.Cal.1993), reconsidered in part, 949 F.Supp. 1415 (N.D.Cal.1996) (holding that individuals may not be held personally liable under Title IX “[s]iñce the Act *1019prohibits discrimination against beneficiaries in programs and activities that receive federal financial assistance, it is the educational institution that must be sued for violations of Title IX”); Roth v. School Bd. of Collier County, 1996 WL 391703 (M.D.Fla.1996) (unpublished decision) (individuals may not be held personally liable under Title IX).1
A. Individual Capacity Liability
Because Title IX only protects against discrimination under any education program or activity receiving federal financial assistance, we agree with the First Circuit’s conclusion in Lipsett that a Title IX claim can only be brought against a grant recipient and not an individual. While the Supreme Court has not directly addressed this issue, such a premise underlies many of its decisions; “[t]he Supreme Court has repeatedly stated that the purpose of Title IX is. to prevent discrimination by grant recipients.” Rowinsky, 80 F.3d at 1013. Moreover, “[t]he fact that Title IX was enacted pursuant to Congress’s spending power is evidence that it prohibits discriminatory acts only by grant recipients.” Id. at 1012 (emphasis added). As the court in Rowinsky explained:
As an exercise of Congress’s spending power, Title IX makes funds available to a recipient in return for the recipient’s adherence to the conditions of the grant. While it is plausible that the condition imposed could encompass ending discriminatory behavior by third parties, the more probable inference is that the condition prohibits certain behavior by the grant recipients themselves.
Id. at 1012-13. “The legislative history of Title IX also supports limiting the statute to the practices of grant recipients ... [since] [throughout the legislative history, both supporters and opponents of the amendment focused exclusively on acts by the grant recipients.” Id. at 1013-14. Finally, “[t]his conclusion is reinforced by the statutory provision for administrative enforcement, which refers only to actions federal agencies may take against institutions.” Petaluma City, 830 F.Supp. at 1577, reconsidered in part, 949 F.Supp. 1415. For example, § 902 of the Act refers only to actions against institutions: “The ultimate sanction for noncompliance is termination of federal funds or denial of future grants.” Petaluma City, 830 F.Supp. at 1560 (quoting North Haven Bd. of Bduc. v. Bell, 456 U.S. 512, 514-15, 102 S.Ct. 1912, 1914-15, 72 L.Ed.2d 299 (1982)). “While a private right of action for damages exists under Title IX, Cannon, 441. U.S. at 688-89, 99 S.Ct. at 1953, Franklin, 503 U.S. at 75, 112 S.Ct. at 1037-38, the fact that administrative enforcement is directed at the institution that receives federal funds’ suggests that the private right of action is similarly confined to actions against the institution.” Petaluma City, 830 F.Supp. at 1577, reconsidered in part, 949 F.Supp. 1415. The 1986 Amendment to Title IX further supports. the conclusion that no private right of action exists against individuals, because that amendment abrogated Eleventh Amendment immunity in this limited respect and allowed remedies “to the same extent as such remedies are available for such a violation in the suit against any public or private entity other than a State.” Petaluma City, 830 F.Supp. at 1577 (quoting 42 U.S.C. § 2000d-7(a)(2) (emphasis added)). Because neither Lloyd *1020Bodie, the principal of Southport High, nor Larry Hensley-Marshand, the assistant principal of Southport; individually, is a grant recipient under' Title IX, Smith’s Title IX claim against them cannot stand.
B. Official Capacity
Whether the claims against Bodie and HensleyMarshand, officially, also fail is a more difficult question. It requires us to determine whether a principal or an assistant principal constitutes a grant recipient. Title IX prohibits discrimination in a “program or activity.” Section 1687 of Title IX defines “program or activity” to “mean all of the operations of — (B) a local educational agency (as defined in § 8801 of this title), system of vocational education, or other school systems,” 20 U.S.C. § 1687, and § 8801 in turn defines “a local education agency” as:
(A) a public board of education or other public authority legally constituted within a State for either administrative control or direction of, or to perform a service function for, public elementary or secondary schools in a city, county, . township, school district, or other political subdivision of a State, or for such combination of school districts or counties as are recognized in a State as an administrative agency for its public elementary or secondary schools.
(B) The term includes any other public institution or agency having administrative control and direction of a public elementary or secondary school.
Because § 8801 directs us to state law to determine the public authority within the school system, we look to Indiana law to determine whether a school district, school board, principal or assistant principal has administrative control over Southport High. Indiana law provides that
[i]t shall be the duty of the metropolitan school district to conduct the educational activities of all the schools in said district in harmony with state law and in general conformity with the laws of the state of Indiana with reference to public education. The control and administration of the schools of the metropolitan school district shall be vested in a metropolitan board of education whose composition, duties, manner of election, and powers are herein prescribed.
Ind.Code § 20-4-8-13. Indiana law further provides that it is “the duty of the board to act upon the recommendations of the metropolitan superintendent of schools and to make all other such decisions and perform all other such duties as fall within the general framework of the laws of the state.” Ind. Code. § 20-4-8-19. Thus, under Indiana law, the school board and school district have administrative control over educational “programs or activities.” Cf. Partee v. Metropolitan Sch. Dist. of Wash. Tp., 954 F.2d 454, 456 (7th Cir.1992) (“Indiana law provides that school boards ... have the authority to ‘prepare, make, enforce, amend, or repeal rules, regulations, and procedures for the government and management of the ... school corporation, its agents, employees and pupils ....’” (citing Ind.Code § 20-5-2-2(i) (1991)).
On the other hand, Indiana law does not provide principals and assistant principals with administrative control over educational “programs or activities.” Indiana law defines a principal to mean “an administrator in a public school located in Indiana.” Ind. Code § 20-1-1.6-3. It gives a principal the authority to “take any action concerning his school or any school activity within his jurisdiction which is reasonably necessary to carry out or prevent interference with an educational function or school purposes.” Ind. Code § 20-8.1-5.1-5. While a principal has some authority over the activities within his school, the above statutes place institutional control over “program or activities” with the school district and school board. Indiana law also does not give assistant principals administrative control over educational programs or activities; absent is any administrative authority or control over the school itself.2 *1021Thus neither a principal nor an assistant principal can be considered a grant recipient. Accordingly, Smith’s Title IX claim against Bodie and Hensley-Marshand, in their official capacities, must also fail.3
II. Sexual Harassment
Smith’s Title IX claim against the School Board and School District remains. Her claim alleges discrimination on the basis of sex, premised on alleged sexual harassment by Rager. Smith does not allege sexual harassment of the quid pro quo nature; rather her claims are in the nature of a hostile environment claim.
In Franklin v. Gwinnett County Public Schools, 503 U.S. 60, 75, 112 S.Ct. 1028, 1037-38, 117 L.Ed.2d 208 (1992), the Supreme Court stated that “Title IX places on [public schools] the duty not to discriminate on the basis of sex, and “when a supervisor sexually harasses a subordinate because of the subordinate’s sex, that supervisor discrimínateos] on the basis of sex.’ We believe the same rule should apply when a teacher sexually harasses and abuses a student.” Id. (quoting Meritor, 477 U.S. at 64, 106 S.Ct. at 2404). This language implies that Title IX’s prohibition of discrimination “on the basis of sex” includes sexual harassment by a teacher of a student. The Tenth Circuit in Seamons v. Snow inferred as much when citing Franklin for the proposition that “Title IX does protect against sexual harassment hostile educational environment.” Seamons v. Snow, 84 F.3d 1226, 1232 n. 7 (10th Cir.1996). In Rowinsky, the court also assumed the same, noting that “sexual harassment by a teacher falls within the framework of Meritor....” 80 F.3d at 1011 n. 11. And later in Canutillo Indep. Sch. Dist. v. Leija, 101 F.3d 393, 396 (5th Cir.1996), the Fifth Circuit noted that “[f]or purposes of this appeal, we assume that discrimination ‘on the basis 'of sex’ includes sexual abuse of a student by a teacher.” Likewise, implicit in the Fifth Circuit’s decision in Rosa H. v. San Elizario Indep. Sch. Dist., 106 F.3d 648, 660 (5th Cir.1997), is that sexual harassment constitutes sex discrimination under Title IX. Similarly, in Murray v. New York University College of Dentistry, 57 F.3d 243, 248-49 (2d Cir.1995), the court assumed that sexual harassment of a student by a teacher constituted discrimination “on the basis of sex.”4 In Kinman v. Omaha Pub. Sch. Dist, 94 F.3d 463, 469 (8th Cir.1996), the Eighth Circuit remanded for trial a student’s Title IX claim based on a teacher’s hostile environment sexual harassment of a student, and in doing so set forth elements for a prima facie case of hostile environment sexual harassment under Title IX. Other Title IX cases involving employees, rather than students, also have held that discrimination “on the basis of sex” includes discriminatory sexual harassment. See, e.g., Lipsett v. University of Puerto Rico, 864 F.2d 881, 901 (1st Cir.1988) (holding that an educational institution may be liable under Title IX for hostile environment sexual harassment). In Doe v. Claiborne County, 103 F.3d 495, 513 (6th Cir.1996), the Sixth Circuit held “the ‘discrimination’ prohibition of Title IX encompasses the sexual harassment of a student by a teacher.” Based upon these precedents, and our agreement *1022with them, we hold that a teacher’s sexual harassment of a student constitutes discrimination “on the basis of sex” for purposes of Title IX.
III. Standard for Institutional Liability
With this conclusion that Rager’s treatment of Smith constitutes sex discrimination under Title IX, the next and even more difficult question is: what standard governs institutional liability of a school district for a teacher’s sexual harassment of a student? This is an issue of first impression in this circuit.
A. Agency Principles
Smith claims that the School Board and School District, who are the grant recipients, are liable under Title IX because Rager was an employee of the recipients, and his actions are imputed to the grant recipients. Smith then proposes two alternative standards for imputing Rager’s actions to the School Board or School District, one based on Title VII’s “knew or should have known” standard, and the other based on common law agency principles, -specifically § 219 of the Restatement (Second) of Agency:
(2) A master is not subject to liability for the torts of his servant acting outside the scope of their employment, unless:
(d) the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation.
As just noted, Smith proposes two alternative standards: one based on Title VII and one based on common law agency principles. While “[cjourts sometimes conflate these theories,” there is a difference — § 219 of the Restatement is a pure agency theory, while Title VU’s “knew or should, have known” standard is an agency-like theory. Rosa H. v. San Elizario Indep. Sch. Dist., 106 F.3d 648, 653 (5th Cir.1997). In fact, the “knew or should have known” standard is really just a negligence theory. Guess v. Bethlehem Steel Corp., 913 F.2d 463, 464-65 (7th Cir.1990). While courts often conflate these theories, “[i]t is helpful to distinguish, pure agency theories from agency-like theories that rely on Title VII’s liability scheme,” because “ ‘common-law [agency] principles may not be transferable in all their particulars to Title VII.’ ” Rosa H., 106 F.3d at 653 (quoting Meritor, 477 U.S. at 72, 106 S.Ct. at 2408). Nevertheless, because Smith’s arguments for adopting Title VII’s “knew or should have known” standard, and the standard set forth in § 219 of the Restatement, both rely on the premise that agency principles, pure or in part, apply in Title IX cases, we begin by considering whether agency principles (in any form) should govern institutional liability.
In proposing that the School Board and School District should be hable for Rager’s actions based on agency principles, Smith relies extensively on Title VII case law in arguing that “[b]ecause Title VII prohibits the identical conduct proscribed by Title IX, Title VII is the most appropriate guide to follow in defining Title IX’s substantive liability standards.” She claims that the Supreme Court adopted this approach in Franklin by stating “sexual harassment by a teacher falls within the framework of Meritor because a teacher is an employee of the grant recipient.”
Initially, we note that Franklin did not consider, much less hold, whether the “knew or should have known” standard of Title VII or agency principles in general should apply in Title IX cases; the Franklin decision did not address, the standard for institutional liability under Title IX. Although the Court drew on its Title VII decision.in Meritor to conclude that sexual harassment is intentional discrimination, it made no reference to Mentor’s (or ány other Title VII case’s) discussion on the standard for institutional liability. Nor did it have to, because in Franklin the school defendants knew of the teacher’s alleged harassment and instead of acting to stop it, dissuaded the plaintiff from pressing charges. Thus, institutional liabili-' ty rested on the institution’s actions, and the Supreme Court was not faced with creating a standard for institutional liability based on a teacher’s actions.
Case law since Franklin also has recognized- that Franklin- left unanswered the *1023question of whether Title VII or agency principles should apply to a Title IX case. See Rosa H., 106 F.3d at 655 (“Franklin did not establish any sweeping parallel between Title IX and Title VII.”); Floyd v. Waiters, 831 F.Supp. 867, 876 (M.D.Ga.1993) (noting that Franklin did not hold the school district liable for the teacher’s actions; rather the defendant school district in Franklin was aware of the sexual harassment against one of its students and did nothing to stop it). Kadiki v. Virginia Comm. Univ., 892 F.Supp. 746, 749 (E.D.Va.1995) (noting that the Supreme Court in Franklin did not address whether Title IX actions are governed by Title VII standards); Nelson v. Almont Comm. Sck, 931 F.Supp. 1345, 1354 (E.D.Mich.1996) (noting that “because the only issue before the Supreme Court in Franklin was whether compensatory damages were available as a remedy for intentional discrimination under Title IX, the Court did not reach the issue of the standard by which the liability of a school district is to be determined----”). “In fact, at least one commentator has surmised that the Supreme Court’s failure to address this issue in the Franklin case will ‘lead to great confusion in the lower courts.’ ” Hastings v. Hancock, 842 F.Supp. 1315, 1318 (D.Kan.1993) (citing Joanne Liebman Matson, Civil Rights — Sex Discrimination in Education-Compensatory Damages Available in a Title IX Sexual Harassment Claim, 15 U.Ark. Little Rock L.J. 271, 296 (1993)). Franklin left open the question of whether Title VII’s “knew or should have known” standard or agency principles govern a Title IX action.
Smith is correct that Title VII and Title IX both prohibit sex discrimination, which includes discriminatory sexual harassment. That is the significance of Franklin’s reference to Meritor. Franklin, 503 U.S. at 75, 112 S.Ct. at 1037 (“Title IX places on [public schools] the duty not to discriminate on the basis of sex, and “when a supervisor sexually harasses a subordinate because of the subordinate’s sex, that supervisor discriminate^] on the basis of sex.’ ” (quoting Meritor, 477 U.S. at 64, 106 S.Ct. at 2404)). Therefore, it is helpful to look to Title VII to determine whether the alleged sexual harassment is severe and pervasive enough to constitute illegal discrimination on the basis of sex for purposes of Title IX. However, “Franklin’s single citation to Meritor Savings to support the Court’s conclusion that sexual harassment is sex discrimination does not by itself justify the importation of other aspects of Title VII law into the Title IX context.” Rosa H., 106 F.3d at 656.
Moreover, while Title VII and Title IX both prohibit sexual harassment as a form of sex discrimination, the statutes differ as to who is prohibited from engaging in that conduct. Title IX prohibits recipients of funds for a “program or activity” from discriminating on the basis of sex, while Title VII prohibits employers from discriminating on the basis of sex. Title VII, however, goes even further — it defines employers to include “any agent of such a person.” 42 U.S.C, § 2000e(b). “In Title IX, in contrast. Congress defined ‘program or activity’ to mean, among other things, ‘operations of ... a school system.’ This definition does hot include agents of such an entity.” Floyd, 831 F.Supp. at 876.
Smith ignores this important distinction. But this void is significant, especially in light of the development of the “knew or should have known” standard and agency principles under Title VII. In Meritor, while the Court had not yet definitively set out the “knew or should, have known” standard, it concluded that lower courts should look to agency principles to .determine whether an employer is liable for sexual harassment of an employee by another employee. The Supreme Court reasoned in Meritor that Congress wanted courts to look at agency principles because Congress explicitly defined “employer” to include any “agent”- of an employer. Meritor, 477 U.S. at 72, 106 S.Ct. at 2408.5 Based on Meritor's directive to look to agency principles, this court adopted the “knew or should have known” standard for liability under Ti-*1024tie VII. Hunter v. Allis-Chalmers Corp., Engine Div., 797 F.2d 1417, 1422 (7th Cir.1986); North v. Madison Area Ass’n for Retarded Citizens-Developmental, 844 F.2d 401, 407 (7th Cir.1988).
Similarly, the “knew or should have known” standard has been applied in suits under the ADA and the ADEA because those statutes define employer to include “any agent of such a person.” In Equal Employment Opportunity Commission v. AIC Security Investigations, Limited, 55 F.3d 1276, 1281 (7th Cir.1995), we explained that “the actual reason for the ‘and any agent’ language in the definition of ‘employer’ was to ensure that courts would impose respondeat superior liability upon employers for the acts of their agent.”6 In Williams v. Banning, 72 F.3d 552, 553 (7th Cir.1995), we stated that in AIC, “we held that the ADA’s definition of ‘employer’ which (like Title VII) includes an employer’s agents, is simply a statutory expression of traditional respondeat superior liability....” Or as the Fourth Circuit put it, the definition of employer to include any agent of such a person is an “unremarkable expression of respondeat superior-that discriminatory personnel actions taken by an employer’s agent may create liability for the employer.” Birkbeck v. Marvel Lighting Corp., 30 F.3d 507, 510 (4th Cir.1994). Thus, the reason the Supreme Court in Meritor applied agency principles to Title VII, and the reason other courts have applied agency principles in the context of ADA and ADEA cases, is because the statutes at issue explicitly defined an employer to include agents of the employer, evidencing Congress’ intent to hold employers liable vicariously.7
Title IX lacks any similar statutory basis for applying agency principles. The language of Title IX does not define a program or activity to include employees working for that program or activity. In fact, it does just the opposite — it defines “program or activity” to include only those who have administrative control of the school. A teacher has no such control. See supra, at 1020-21. Thus, no basis exists under the statutory language to hold grant recipients liable based on agency principles. See Rosa H, 106 F.3d at 654 (refusing to apply agency principles to Title IX because Title IX does not define “program or activity” to include agents of such an entity); Floyd, 831 F.Supp. at 876 (accord); Howard, 876 F.Supp. at 973-74 (accord).
In response, Smith cites numerous cases which held, stated- in dicta, or implied that an educational institution could be liable under Title IX based on agency principles.8 For instance, in Rowinsky, 80 F.3d at 1011 n. 11, the Fifth Circuit assumed that a recipient of federal education funds could be held liable for sex discrimination when an agent was the perpetrator: “[Sjexual harassment by a teacher falls within the framework of Meritor because a teacher is an employee of the gra<nt recipient. Thus, like the normal sexual harassment case, it is an agent of the defendant who is guilty of the harassment.” However, as discussed below, the Fifth Circuit properly rejected this dicta in Rosa H., 106 F.3d at 657 n. 5:
*1025Smith also relies on Murray, 57 F.3d at 249. In Murray, the Second Circuit relied on language in Franklin to conclude that common-law principles of agency determine whether the harassing conduct of a supervisor or coworker should be imputed to the employer. - Specifically, Murray quoted Franklin:
Unquestionably, Title IX placed on [such institutions] the duty not to discriminate on the basis of sex, and “when a supervisor sexually harasses a subordinate because of the subordinate’s sex, that supervisor ‘discriminatefs]’ on the basis of sex.” Meritor Sav[ings] Bank, FSB v. Vinson, 477 U.S. 57, 64, 106 S.Ct. 2399, 2404, 91 L.Ed.2d 49 (1986). We believe the same rule should apply when a teacher sexually harasses and abuses a student. Congress surely did not intend for federal moneys to be expended to support the intentional actions it sought by statute to proscribe.
Murray, 57 F.3d at 249.
Based on Franklin’s citation to Meritor, the Second Circuit in Murray concluded that a Title IX suit for sex discrimination based on sexual harassment should use the same standards as those applied in cases under Title VII, including common-law agency principles. Murray, 57 F.3d at 249. Similarly, in Lipsett, 864 F.2d at 900, the First Circuit held “following Meritor, that in a Title IX ease, an educational institution is liable upon' a finding of hostile environment sexual harassment perpetrated by its supervisors upon employees if an official representing that institution knew, or in the exercise of reasonable care, should have known, of - the harassment’s occurrence, unless that official can show that he or she took appropriate steps to halt it.”9 Likewise, Kinman, 94 F.3d 463, relied on Franklin, 503 U.S. at 74-75, 112 S.Ct. at 1037-38, and Meritor as authority for holding a school district liable for the alleged sexual harassment by one of its teachers. (Kinman also recognized the divergent views on the appropriate standard for holding a school liable for alleged sexual harassment by a teacher.) See Kinman, 94 F.3d at 468 (listing various approaches taken in imputing liability to a school district).
These decisions place inordinate reliance on Meritor while ignoring its rationale.10 Meritor applied agency principles to Title VII because the statute defined “employer” to include “agents of the employer.” See Meritor, 477 U.S. at 72, 106 S.Ct. at 2408 (specifically noting “Congress’ decision to define ‘employer’ to include any ‘agent’ of an employer, 42 U.S.C. §. 2000e(b)” while also cautioning that “common-law [agency] principles may not be transferable in all their particulars to Title-VII.”).' Unlike Title VII, Title IX does not contain any language that includes the educational institution’s agents. Yet none of these circuit decisions even noted, much less analyzed, this significant difference between the two statutes. -Neither did most of the district court cases addressing the appropriate standard for institutional liability under Title IX.11 See, e.g., Petaluma City, 949 F.Supp. 1415; Hastings v. Hancock, 842 F.Supp. 1315, 1318 (D.Kan.1993); Moire v. Temple, 613 F.Supp. 1360, 1366-67 (E.D.Pa.1985), aff'd, 800 F.2d 1136 (3d.Cir. 1986) (unpublished); Pinkney v. Robinson, 913 F.Supp. 25, 31-34 (D.D.C.1996); Bosley v. Kearney R-1 Sch. Dist, 904 F.Supp. 1006, 1020-25 (WD.Mo.1995); Bolon v. Rolla Pub. Sch, 917 F.Supp. 1423, 1427-29 (E.D.Mo. 1996) (holding school district strictly liable for the actions of a teacher who engaged in sex discrimination). Indeed, one district court that recognized the difference between *1026Title IX and Title VII found it irrelevant: “Given the purpose of Title IX and Congress’ mandate that it be broadly interpreted, it is essentially inconsequential that Title IX does not expressly adopt agency principles.” Kadiki v. Virginia Commonwealth Univ., 892 F.Supp. 746, 754 (E.D.Va.1995). But Kadiki failed to recognize that the Supreme Court in Meritor emphasized that in Title VII the definition of “employers” included “any ‘agent’ of the employer.” Meritor, 477 U.S. at 72, 106 S.Ct. at 2408.12
Cases holding to the contrary, that agency principles do not apply in the Title IX context-Rosa H., 106 F.3d 648 (5th Cir.1997), Floyd, 831 F.Supp. 867; Howard, 876 F.Supp. at 974 — all did more than merely cite Meritor, they looked behind its rationale and recognized the absence of a statutory basis for applying the “knew or should have known” standard in the Title IX context. In Rosa H., 106 F.3d at 654, the Fifth Circuit explained that “[t]he text of Title IX gives us further reason to think that the school district did not assume the responsibility to pay damages whenever a teacher sexually harasses a student and falls within the scope of common-law agency rules. While Title VII makes explicit reference to the agents of employers, 42 U.S.C. § 2000e(b),- Title IX does not instruct courts to impose liability based on anything other than the acts of the recipients of federal funds.” Similarly, in Floyd v. Waiters, 831 F.Supp. 867, 876 (M.D.Ga.1993), the court reasoned that common-law agency principles do not apply to claims under Title IX because “under Title VII, the term ‘employer! encompasses ‘any agent of such a person.’ ” Id. (quoting 42 U.S.C. § 2000e(b)). “In Title IX, in contrast, Congress defined ‘program or activity’ to mean, among other things, ‘operations of ... a school system.’ This definition does not include the agents of such an entity.” Id. And in Howard, 876 F.Supp. at 974, the court noted that cases which applied agency principles to Title IX based on Title VII case law “are of very limited value, however, as they do not directly address the differences in Title VII and Title IX.” See also, Wright v. Mason City Comm. Sch. Dist., 940 F.Supp. 1412, 1420 (N.D.Iowa 1996) (holding that while Title IX encompasses a claim for peer-to-peer sexual harassment, an educational institution will be liable only if it “knew o‘f the harassment and intentionally failed to take the proper remedial measure because of the plaintiffs sex.”); Nelson v. Almont Comm. Sch., 931 F.Supp. 1345, 1354-56 (E.D.Mich. 1996) (rejecting Title VII’s “knew or should have known” standard and instead adopting Title Vi’s intentional discrimination standard); R.L.R. v. Prague Pub. Sch. Dist. I-103, 838 F.Supp. 1526, 1534 (W.D.Okla.1993) (granting school district summary judgment on plaintiffs’ Title IX claim because plaintiffs failed to establish “discriminatory intent” by coming “forward with any facts showing the custom or policy, acquiescence in, conscious disregard of, or failure to investigate or discipline on the part of the School District or any named defendant.”).
*1027We agree with the Fifth Circuit in Rosa H. 13 and the several district courts in their conclusion that Mentor’s application of agency principles, and the agency-like principles designated in the Title VII context, should not be extended to Title IX, which does not include agents of a program or activity within its purview. Rosa H., 106 F.3d at 654 (“We conclude that Title IX does not contemplate a theory of recovery based purely on agency law.”). While Title VIPs definition of employers to include agents of the employer unequivocally demonstrated Congress’ intent to apply agency principles, Title IX conspicuously lacks any language which indicates that Congress intended that agency principles be used to create institutional liability. See, e.g., Rosa H., 106 F.3d at 654. And “[t]his court will not read into Title IX language expressly included in Title VII, but left out of Title IX.” Howard, 876 F.Supp. at 974.14
This conclusion is further supported by Supreme Court precedent. Where Congress failed to provide a statutory basis for the application of agency principles, the Supreme Court has refused to adopt a federal law incorporating common-law agency principles. Monell v. Dept. of Soc. Serv. of City of N.Y., 436 U.S. 658, 691-92, 98 S.Ct. 2018, 2036-37, 56 L.Ed.2d 611 (1978). In Monell, the Supreme Court held that a municipality could not be held hable under § 1983 based on the common-law agency theory of respondeat superior because the statute and legislative history were devoid of any intent to create a federal law of respondeat superior. The Supreme Court reasoned that since § 1983 prohibited a person (which included municipalities) from “causing” a deprivation of constitutional rights, for recovery against a municipality it must have been the municipality that “caused” the deprivation: “[T]he language [of § 1983] plainly imposes liability on a government that, under color of some Official policy, ‘causes’ an employee to violate another’s constitutional rights. At the same time, that language cannot be easily read to impose liability vicariously on governing bodies solely on the basis of the existence of an employer-employee relationship with a tortfeasor.” Id.
Title IX’s language also provides no basis for creating a standard of liability based on agency principles. Just as the municipality must “cause” the discrimination, and not merely a municipal employee, so too must a “program or activity” “cause” the discrimination, and not merely an employee of the program or activity. See Floyd, 831 F.Supp. at 876 (assuming that the teacher’s assaults on the plaintiffs constituted discrimination based upon sex, the school board took no part in this discrimination, so the teacher’s actions do not constitute discrimination under a “program or activity”).15 Just as the *1028Supreme Court refused to impute an employee’s actions to the municipality in Monell based on agency principles, so too do we refuse to impute a teacher’s actions to a School District or School Board.
B. Spending Clause Legislation
Not only does the statutory language for Title VII and Title IX differ as to who is prohibited from discriminating, but the constitutional source of the statutes also differs, and this difference further supports our conclusion that agency principles cannot be applied to a Title IX suit. Congress passed Title VII under the auspices of the Commerce Clause, while Title IX was passed pursuant to Congress’ Spending Clause power. Rosa H., 106 F.3d at 654 (“We have consistently viewed Title IX as Spending Clause legislation.”); Lieberman v. University of Chicago, 660 F.2d 1185, 1187 (7th Cir. 1981) (“Title IX, as an integral part of this legislative scheme, must be deemed an exercise of Congress’ Spending Power, ... ”). This difference is significant because statutes adopted pursuant to Congress’ spending-power allow monetary recovery only for intentional discrimination. Guardians Ass’n, 463 U.S. 582, 599, 103 S.Ct. 3221, 3231, 77 L.Ed.2d 866 (1983). As the Supreme Court noted in Franklin, “remedies were limited under such Spending Clause statutes when the alleged violation was unintentional." Franklin, 503 U.S. at 74, 112 S.Ct. at 1037 (citing Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 28-29, 101 S.Ct. 1531, 1545-46, 67 L.Ed.2d 694 (1981)) (emphasis added). This “militates against the imposition of agency principles,” because adopting agency principles in a Title IX case would create institutional liability in eases where the institution lacked the requisite intent to discriminate. Rosa H., 106 F.3d at 654.
Smith claims that “[i]ntentional sexual harassment by a teacher for which a school is responsible satisfies the proof of intentional misconduct required for violations of statute enacted under Congress’ spending power.” Initially we note that this argument begs the questions of “when the school is responsible.” Nonetheless, Smith seems to be arguing that the intent necessary for liability in Spending Clause eases is satisfied because Rager’s conduct was intentional and that intent is imputed to the School Board and School District.
While Smith contends that imputing a teacher’s intent to the school district limits institutional liability to intentional actions, this argument improperly shifts the focus from the “program or activity,” which must have acted'intentionally, to the teacher, who in abusing a child clearly acts intentionally, including his intent to keep his unwarranted conduct secret. “We do not agree that a plaintiff can evade Title IX’s intent requirement so easily.” Rosa H., 106 F.3d at 652. The appropriate question still. must be whether the “program or activity” acted with intent, because as held above, only a grant recipient — a recipient of grant funds to run a “program or activity”- — can violate Title IX. Thus, it must be the grant recipient — an institution or agency having administrative control over the school — that discriminates against the plaintiff. 20 U.S.C. § 8801. Smith’s Title IX suit against the School Board and School District, however, is based on alleged sexual harassment by Rager — a teacher, not a grant recipient — and neither standard Smith proposes for imputing Rag-er’s intent to the School Board or School District requires the program or activity to act intentionally. This is best illustrated by considering separately the standards she suggests.
, First, Smith argues that Title VII's “knew or should have known” theory imputes a teacher’s intent to a school. Under this standard the School District and School Board would be liable to Smith if. they either “knew” of the alleged sexual harassment, or “should have known,” but failed to respond. While a School District or School Board that “knew” and failed to respond to sex discrimination would act with the intent required to suffer a monetary judgment under the Spending Clause, see infra at 1033-34, the *1029“should have known” prong of Title VII’s standard is a standard based on negligence, not intent. Guess v. Bethlehem Steel Corp., 913 F.2d 463, 465 (7th Cir.1990) (the knew or should have known standard “is a negligence standard____”). Negligence cannot support a monetary award for a claim brought under Spending Clause legislation, Guardians, 463 U.S. at 599, 103 S.Ct. at 3231; Franklin, 503 U.S. at 74, 112 S.Ct. at 1037; Pennhurst, 451 U.S. at 28-29, 101 S.Ct. at 1545-46, so a “should have known” standard cannot create institutional liability under Title IX. Rosa H., 106 F.3d at 656-58.16
The second standard Smith proposes is a pure agency theory based on § 219(2)(d) of the Restatement (Second) of Agency.' As excerpted earlier, this section provides that an employer is liable “for the torts of his servants acting outside the scope of their employment, ... [if] the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation.”17 Smith claims that the School Board and School District are liable under § 219 because Rager was able to engage in the sexual relationship with her because of the authority he had over her.
Section 219(2)(d) of the Restatement is of no avail for two reasons. First, Smith’s allegations do not fall within the narrow factual circumstances covered by the “or he was aided in accomplishing the tort by the existence of the agency relation,” clause of § 219(2)(d). As “[t]he commentary to the Restatement suggests ... this exception embraces a narrower concept that holds the employer liable only if the tort was ‘aceomplished by an instrumentality, or through conduct associated with the agency status.’” Gary v. Long, 59 F.3d 1391, 1397 (D.C.Cir. 1995) (quoting Restatement § 219 cmt. e). The commentary illustrates liability under the second clause of § 219(2)(d) with two narrow examples: a telegraph operator sending false telegraph messages, or a store manager cheating customers at the store. As the D.C. Circuit recognized, “[i]n such cases, ‘[l]i-ability is based upon the fact that the agent’s position facilitates the consummation of the [tort], in that from the point of view of the third person the transaction seems' regular on its face and the agent appears to be acting in the ordinary course of the business confided to him.’ ” Gary, 59 F.3d at 1397 (quoting Restatement § 261 cmt. a; see also id. § 219 cmt. e (citing § 261 in discussion of § 219(2)(d))). In this case, Rager’s conduct could hardly “seem regular on its face,” nor could Rager appear to be acting in the ordinary course of the business confided to him in having sexual intercourse with Smith. And- Smith does not contend otherwise. Both carefully hid the conduct because of its obvious irregularity, to say the least. Therefore, factually, § 219(2)(d) cannot be used to impute Rager’s intent to the School Board and School District.
Smith’s reliance on § 219(2)(d) is misplaced for another reason — it.creates strict liability and strict liability cannot form the basis for a monetary award in a suit brought pursuant to Spending Clause legislation. If we were to adopt Smith’s broad reading of § 219(2)(d), we would in effect create strict liability for school districts because “in virtually every case in which a teacher harasses, seduces, or sexually abuses a student,” the teacher’s status as a teacher often enables *1030the teacher to abuse the student, so liability would arise under § 219(2)(d) because the servant was “aided in accomplishing the tort by the existence of the agency relationship.” Rosa H., 106 F.3d at 655. Liability is strict when it is imposed no matter how reasonably the defendant acts. See W. Page Keeton et al., Prosser and Keeton on the Law of Torts, 75 at 534 (5th ed. 1984) (“ ‘Strict liability,’ as that term is used in this chapter, and as that term is commonly used by modern courts, means liability that is imposed on an actor apart from ... a breach of a duty to exercise reasonable care, i.e., actionable negligence. This is often referred to as liability without fault.’.’). In other words, where liability arises without regard to fault and apart from negligence, liability is strict. Konradi v. United States, 919 F.2d 1207, 1210 (7th Cir. 1990) (“The liability of an employer for torts committed by its employees — without any fault on his part — when they are acting within the scope of their employment, the liability that the law calls ‘respondeat superior,’ is a form of strict liability. It neither requires the plaintiff to prove fault on the part of the employer nor allows the employer to exonerate himself by proving his freedom from fault.”). See also Guess v. Bethlehem Steel Corp., 913 F.2d 463, 465 (7th Cir.1990) (“The truth is that respondeat superior is, from the employer’s standpoint, a doctrine of strict liability. It makes the employer liable, regardless of what he knew or should have known or did or should have done, for the torts that his employees commit in the course of, or (in the case of intentional torts) in the furtherance of, their employment.”). To impute liability to a program or activity under § 219 based on a teacher’s actions, as Smith seeks to do, would create liability for the School District and School Board even if they acted without notice of the alleged harassment; even if they had no reason to know of the harassment; and even if they acted entirely reasonably. That is strict liability, North v. Madison Area Ass’n for Retarded Citizens, 844 F.2d 401, 407 (7th Cir.1988), and cannot be used to support a monetary award in a Spending Clause ease such as this.
That was the Fifth Circuit’s holding in Canutillo, 101 F.3d at 393. In Canutillo, the Fifth Circuit rejected strict liability, explaining that “[sjimply put, strict liability is not part of the Title IX contract.” Id. at 399. In rejecting strict liability as the standard for liability under Title IX the Fifth Circuit explained that:
Congress must be unambiguous in expressing to school districts the conditions it has attached to the receipt of federal funds. Nothing in the statute, however, places a school district on notice that it will be strictly liable for its teachers’ criminal acts. In fact, the conditions Congress imposed on Title IX recipients are limited to those anti-discrimination factors found in its sparse wording; there is no mention of liability standards, such as intent, actual knowledge, gross negligence, or lack of due diligence, let alone the imposition of liability without fault.
Id. at 398-99.
We agree with Canutillo that an education institution cannot be held strictly hable under Title IX. 101 F.3d at 400. We do not believe that the imposition of strict liability is appropriate for a discrimination case, especially one brought under Title IX:
[Tjhere is no sound policy reason to hold a school district financially accountable, through strict liability, for the criminal acts of its teachers.... [0]ne reason courts and state legislatures have so allocated risk to product manufacturers is because they are better able to spread liability costs among consumers by raising the price of their products. A school district should not be required to perform a comparable task, even if it could. A school district’s “products” are its students; there is no “price” to raise. Instead, public schools are funded typically by a combination of federal and state funds and property taxes levied by the local governing body. We refuse to impose the necessity of a “Title IX assessment” in order to spread the risk of million-dollar verdicts. As horrible a crime as child abuse is, we do not live in a risk-free society; it contorts “public policy” to suggest that communities should be held financially responsible in *1031this manner (strict liability) for such criminal acts of teachers.
101 F.3d at 399.
As the Fifth Circuit noted, “another reason behind product manufacturer strict liability is that the manufacturer is in a better position than a consumer to search for and discover defects in design or manufacture.” Canutillo, 101 F.3d at 399 (5th Cir.1996). But school districts have nothing to design, test, or inspect. “[I]ts ‘products’ are its students; they are not the offending item.” Additionally,
teacher-student sexual abuse is conducted in secret making it difficult, if not impossible to detect without being told about it. Obviously, immediate and adequate notice is one of the best means of stopping abuse and removing (and convicting) the abuser. In fact, as a matter of public policy, it may well be that requiring knowledge by the school district, often acquired by being told about such abuse, as a condition to recovery of damages will result in much quicker and greater protection not only to the person being abused and providing notice, or on whose behalf it is given, but will also better protect or otherwise benefit those who may then be undergoing abuse from that, or another, teacher.
Canutillo, 101 F.3d at 399.
Moreover, as we noted in Konradi, 919 F.2d at 1210, in deciding whether to impose strict liability generally, we consider whether it will give employers an incentive to alter the nature or level of their activity, rather than altering their care. Id. As in Konradi it should be apparent here that a school should not be held strictly liable for a tort committed by its employees because no plausible alteration of the activity creating the liability (educating students) is possible. In the final analysis, “[s]trict liability converts the school district from being the educator of children into their insurer as well. And, if it is their insurer, it is most arguable that its role as educator — needed now more than ever — will suffer, and suffer most greatly.” Canutillo, 101 F.3d at 400.
Not only does the policy underlying the imposition of strict liability weigh against applying strict liability in a Title IX suit, the policy concerns involved in Spending Clause legislation compel the conclusion that agency principles have no place in Title IX litigation because “there is nothing to give notice to the recipient of federal funds that the funds carry the strings of such liability.” Rosa H., 106 F.3d at 656.
While Guardians involved Title VI rather than Title IX, the rationale provided in Guardians for denying monetary damages for violations of Spending Clause legislation is equally applicable here and is worth stating at length:
This is because the receipt of federal funds under typical Spending Clause legislation is a consensual matter: the State or other grantee weighs the benefits and burdens before accepting the funds and agreeing to comply with the conditions attached to their receipt. Typically, before funds are advanced, the appropriate federal official will determine whether the grantee’s plan, proposal, or program will satisfy the condition of the grant or other extension of federal funds, and the grantee will have in mind what its obligations will be. When in a later private suit brought by those for whose benefit the federal money was intended to be used is determined, contrary to the State’s position, that the conditions attached to the funds are not being complied with, it may be that the recipient would rather terminate its receipts of federal money than assume the unanticipated burdens.
Thus, the Court has more than once announced that in fashioning remedies for violations of Spending Clause statutes by recipients of federal funds, the courts must recognize that the recipient has “alternative choices of assuming the additional costs” of complying with what a court has announced is necessary to conform to federal law or not using federal funds and withdrawing from the federal program entirely. Although a court may identify the violation and enjoin its continuance or order recipients of federal funds, prospectively to perform their duties incident to the receipt of federal money, the recipient has the option of withdrawing and hence *1032terminating the prospective force of the injunction.
Guardians, 463 U.S. at 596, 103 S.Ct. at 3229.
As this excerpt demonstrates, courts “must respect the privilege of the recipient of federal funds to withdraw and terminate its receipt of federal money rather than assume the further obligations and duties that a court has declared are necessary for compliance.” Id. at 597, 103 S.Ct. at 3230. The Supreme Court in Franklin relied on this rationale in concluding that monetary damages are not available for unintentional violations of Title IX stating that: “the receiving entity of federal funds lacks notice that it will be liable for a monetary award. This notice problem does not arise in a case ... in which intentional discrimination is alleged.” Franklin, 503 U.S. at 74-75, 112 S.Ct. at 1037.
The policy against awarding monetary damages for unintentional violations of Spending Clause legislation which was summarized in Guardians and relied on in Franklin also “militate[s] against the imposition- of agency principles” under Title IX. Rosa H., 106 F.3d at 654. As the Fifth Circuit aptly explained in Rosa H.\
As a statute enacted under the Spending Clause, Title IX should not generate liability unless the recipient of federal funds agreed to assume the liability. In this case, forcing the school district to pay for the unauthorized acts of [a teacher] would be using a federal spending statute to create a private cause of action without regard to whether the recipient of the federal funds knew anything about the violation. When the school board accepted federal funds, it agreed not to discriminate on the basis of sex. We think it unlikely that it further agreed to suffer liability whenever its employees discriminate on the basis of sex. Adopting the customary tort paradigm utilized by the district court would compromise Franklin’s principle that “legislation enacted pursuant to the spending power is much in the nature of a contract.”
Rosa H., 106 F.3d at 654 (quoting Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17, 101 S.Ct. 1531, 1539-40, 67 L.Ed.2d 694 (1981)).
“Congress did not enact Title IX in order to burden federally funded educational institutions with openended negligence liability.” Rosa H., 106 F.3d at 656. If a negligence standard such as Title VU’s “knew or should have known” standard is applied under Title IX, after the fact, by a jury, a school can never know the conditions attached to the funds; the jury’s announcement of what is necessary to conform under Title IX will come too late for the grantee to weigh “the benefits and burdens before accepting the funds____” Guardians, 463 U.S. at 596, 103 S.Ct. at 3229. Agency principles that result in strict liability, such as the principles set forth in § 219(2)(d) of the Restatement, are even less justified because the grant recipient can neither know, nor reasonably protect itself from liability. Agency principles will thus deprive schools of the choice of withdrawing from the federal program entirely to avoid the additional cost of compliance— something required by the consensual nature of Spending Clause legislation. Id. Given that we are dealing with children and claims of sexual harassment, which could encompass sexual abuse and molestation, the “additional costs of complying” could prove enormous, although that cost will be unknown until it is too late to turn down the funds. This could financially cripple public education.
Smith responds again by citing Franklin. She contends that because the Court in Franklin held that the school district could be held liable for the teacher’s sexual abuse, and in doing so noted that liability only arises where the conduct is intentional, the Court must have believed that a teacher’s intent could be imputed to the school. However, in Franklin the defendants knew of the alleged harassment but took no action to halt it, and in fact dissuaded the plaintiff from pressing charges. The school itself acted intentionally; the intent of the teacher was not imputed to the school. In short, “[w]e can find nothing in Franklin to support the trial court’s theory that Title IX can make school districts hable for monetary damages when the district itself engages in no intentional discrimination.” Rosa H., 106 F.3d at 656. See also id., 106 F.3d at 654 (“We are not convinced *1033that Franklin instructs us to find school districts vicariously liable whenever an employee intentionally harasses a student because of sex and satisfies the agency rules____”).18
Although the parties did not raise it, in deciding that agency principles should apply to Title IX cases, other courts have relied on the Department of Education’s Office of Civil Rights’ view. In its “Final Policy Guidance,” issued on March 13, 1997, the OCR registered its disagreement with the Fifth Circuit’s interpretation of Title IX in Rosa H. and Rowinsky, and stated that its long-recognized policy has been that sexual harassment (including same-sex sexual harassment) of students by school employees, other students, or third parties is covered by Title IX and that agency standards govern institutional liability. In the view of the OCR, a school is always liable for quid pro quo harassment of a student even if the school did not approve, know of, or could not have reasonably known of the harassment. For hostile environment harassment by school employees, other students, or third parties, the OCR advises that the school is liable under Title IX for negligence. In the case of school employees the school is also automatically liable if the employee acted with what the OCR terms “apparent authority,” or was aided in carrying out the sexual harassment of the student by his position. Under the Guidelines’ discussion of apparent authority, even employees such as'janitors or cafeteria workers may have apparent authority to sexually harass a student if the student believed the employee had authority over them. Whether the student’s subjective view of “apparent” authority was reasonable depends, among other things, upon the age of the student. “[I]n some cases the younger a student is, the more likely it is that he or she will consider any adult employee to be in a position of authority.” 62 Fed.Reg. 12034, 12039. Under this construct, a very young child’s subjective belief may create strict liability for school districts under Title IX for an employee’s criminal sexual molestation of that child. Id. See also Rosa H., 106 F.3d at 658 n. 6.
While this recently elaborated Policy Guidance may represent the longstanding view of the OCR, the application of agency principles has no foundation in the language of Title IX. Yet this Policy Guidance includes a comprehensive discussion of numerous examples of situations where school systems would, be exposed to liability under various agency theories. In concluding that agency principles apply in the Title IX context, the Policy Guidance fails to examine the statutory language of Title IX, its Spending Clause source, and the significant differences between it and Title VII. Concisely put: the Guidance provides no rationale for applying agency principles and thus no basis for the greatly expanded exposure to liability for educational institutions. The Department of Education also completely failed to consider the financial impact its policy — including the adoption of strict liability — would have on school districts that accept federal funds under Title IX. Moreover, the Policy Guidance is neither a regulation, nor an interpretation of regulations promulgated by the OCR or DOE. See Policy Guidance, 62 Fed.Reg. 12034 (“the Guidance provides educational institutions with information regarding the standards that are used by the Office of Civil Rights.”). And while the OCR sought public comment before issuing the Policy Guidance, it “did not request substantive comments” on its policy views. Policy Guidance, 62 Fed. Reg. 12035. Under these circumstances we cannot defer to the OCR’s Policy Guidance. See Rowinsky, 80 F.3d at 1016 (“Absent a reasoned explanation for why the statutory language supports applying Title VI to peer harassment, the OCR’s interpretation should not be accorded any deference.”); Doe v. Reivitz, 830 F.2d 1441, 1446-47 (7th Cir. 1987) (“The preliminary power of interpretation is in the agency, but the final power of interpretation is in the courts ... [T]he weight given to an agency interpretation depends on many factors, including the validity *1034of its reasoning....”); Bennington v. Didrickson, 22 F.3d 1376, 1383 (7th Cir.1994) (recognizing the “obligation to defer to the interpretation of the agency whenever that interpretation can be said to embody a deliberate and considered interpretation of legislative intent.”)
The question remains: What is the appropriate standard for institutional liability under Title IX? The Fifth Circuit in Rosa H. concluded that the appropriate standard was an actual knowledge standard: “We hold that a school district can be liable for teacher-student sexual harassment under Title IX only if a school official who had actual knowledge of the abuse was invested by the school board with the duty to supervise the employee and the power to take action that would end such abuse and failed to do so.” 106 F.3d at 660. In so holding, the Fifth Circuit relied on Farmer v. Brennan, 511 U.S. 825, 114 S.Ct. 1970,128 L.Ed.2d 811 (1994), which although based on a “very different area of substantive law,” is helpful because it “highlight[s] the distinction between an intentional wrong and a wrong that flows from mere neglect.” Rosa H., 106 F.3d at 658-59.
We find Rosa H. persuasive and today join the Fifth Circuit in holding that under Title IX, a school district is liable for teacher-student sexual harassment “only if a school official who had actual knowledge of the abuse was invested by the school board with the duty to supervise the employee and the power to take action that would end such abuse and failed to do so.” Id. at 660. In this case, there is no evidence that the defendants knew of the sexual harassment and failed to respond. For whatever reason Smith (and of course Rager) made every effort to hide their ongoing relationship that lasted the entire school year and beyond. Apparently they were successful. Once Smith reported Rager’s behavior, the undisputed facts demonstrate that the school took swift and decisive action: Rager was immediately suspended and told to resign and he was reported to the state board of education. While Smith claims there is a factual question in this ease as to whether the defendants should have known of the sexual relationship between her and Rager, she does not contend that they actually knew of the relationship and failed to respond, as had been the case in Franklin. Nor do the facts support any such inference. Where a grant recipient has no knowledge of alleged discrimination, it cannot be said to have intentionally discriminated against the plaintiff.
CONCLUSION
Title 'IX' prohibits discrimination on the basis of sex by a “program or activity.” Thus, the appropriate defendant is the “program or activity” itself — -in other words, the grant recipient. Because Title IX only prohibits discrimination by the “program or activity,” it must be the “program or activity” and the institution that operates it that discriminate, not merely one of its employees. Agency principles, either pure or the agency-like principles of Title VII, cannot impute discriminatory conduct of an employee to the “program or activity” because Title IX contains no language indicating that Congress intended agency principles to apply. Rather, “a school district can be liable for teacher-student sexual harassment under Title IX only if a school official who had actual knowledge of the abuse was invested by the school board with the duty to supervise the employee and the power to take action that would end such abuse and failed to do so.” Rosa H., 106 F.3d at 660. Here there is no evidence. that anyone had actual knowledge of the alleged relationship between Smith and Rager. On the contrary, it appears that Rager and Smith successfully hid their conduct. Therefore, the School Board and School District were entitled to summary judgment. Moreover, the principal and assistant principal do not constitute the educational “program or activity,” either individually or officially, so they too are entitled to summary judgment. Accordingly, we reverse the district court’s denial of summary judgment and remand to the district court with instructions- to enter summary judgment in favor of defendants on Smith’s Title IX claim. We express no opinion on the merits of plaintiffs’ other claims.
ReveRSed and Remanded.