The U.S. Department of Justice and the Philadelphia-based AIDS Law Project of Pennsylvania said Wednesday they have reached a $715,000 settlement with a school that refused to admit a student with HIV.

The Milton Hershey School in Hershey, Pa., is a cost-free private residential school that serves children with demonstrated social and financial needs, according to the settlement agreement.

In a federal lawsuit filed in November 2011, “Mother Smith,” a pseudonym, charged that the school violated the Americans with Disabilities Act when it refused to consider “Abraham Smith” for admission to the eighth grade for fall 2011 because he has HIV.

In its response to the lawsuit, the school denied it violated Abraham Smith's rights under the ADA and other laws, and contended its decision “was the result of its analysis of potential risks to other students and the legal rights of Abraham Smith or other applicants with HIV,” according to the settlement agreement.

The DOJ's position is that while the school “did not act with malice or animus” toward either Abraham Smith or other children with HIV, it cannot show enrolling them would post a “direct threat” to others' health or safety, according to the settlement agreement.

Under terms of the agreement, the school will pay $700,000 to Mother Smith and Abraham Smith and a $15,000 civil penalty to the federal government.

The school agreed not to exclude persons with disabilities, including those with HIV. It also agreed to draft a nondiscrimination and equal opportunity policy and to provide ADA training. The school has made no admission of liability.

The school has offered to process Abraham's admission to the school, but Mother Smith has declined the offer, according to the agreement.

Zane David Memeger, U.S. attorney for the Eastern district of Pennsylvania in Philadelphia, said in a statement, “This is a very significant case, affirming the rights of persons with HIV, and we applaud the school for working so cooperatively to amend its position on this matter.”

A school spokesman could not be reached for comment.

In May, the Department of Justice reached settlements with two health care providers who allegedly refused to service people with HIV in violation of the ADA.