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I agree that other students would probably keep quiet if they received "special treatment"-- but if that is the case here, why should the school's decision with this person be condoned?
Did you miss the [/sarcasm] part of my post? Students RARELY stay quiet when they receive special treatment- they are quick to brag about it- it happened when I was in school, and it happens now (and word gets around much faster now due to email / text / Facebook).
I don't give special treatment when it comes to discipline, grading, or anything, because to do someone a favor obligates me to provide that same favor to everyone...and word will get out.
I'll disagree with you- explicitly or implicitly, the past drug offense would have put the student on a short leash. He/she ran out of leash.