For youth with emotional and behavioral challenges, there is a trend of racial minority overrepresentation in restrictive settings. In particular, African American youth are more likely to be placed outside of school in settings such as in juvenile justice facilities and day treatment centers. “System of care” refers to a community-based approach to meeting the needs of youth with emotional and behavioral challenges that emphasizes cultural competence while providing services in the least restrictive environment. In this talk, I will look at a study which investigated the relationship between placement restrictiveness (i.e., home, foster home, juvenile justice, etc.), emotional-behavioral functioning, race, and parent perceptions of cultural competence. I will address the study findings, in addition to providing an explanation of systems of care and how these findings relate to current educational practices for youth with emotional and behavioral challenges.