The incident happened in a classroom at Kankakee High School. Students recorded the interaction, telling administrators the teacher used the slur during a minor conflict with Michael Nelson, who said he's still in shock.
"It made me feel like less than a Black man, a young Black man at that, from a small community that's trying to do the most for that community," Nelson said.
The superintendent for Kankakee schools said they're disappointed.
"The teacher has been placed on paid leave pending a full investigation. As of the end of the day today, KHS administration have collected statements from the students, talked with the students in the classroom and reviewed several videos," the district said in a statement.
The principal will make a recommendation on disciplinary action after the investigation, the district said.