Horizons on the Hudson elementary school teacher Jennifer Krom was allegedly found with 200 bags of heroin and arrested earlier this month.
The 39-year-old woman was accompanied by a 29-year-old wanted fugitive named Jason Pease.
The pair was arrested after an investigation into drug sales by the Ulster County Regional Gang Enforcement Narcotics Team.
Pease is being held without bail while Krom was released on an appearance ticket.
Newburgh Superintendent Roberto Padilla assured News 12 that the district is taking every step to ensure student safety.
Krom was placed on administrative leave.