Feds Cut Race-Based Grants for Minority Colleges — $350M Reallocated
The U.S. Department of Education just made a move that’s bound to rattle higher ed institutions nationwide.
Effective immediately, the Department is pulling the plug on several Minority-Serving Institution (MSI) discretionary grant programs — the kind that handed out federal dollars based on racial and ethnic quotas. Why? Because, according to the feds, those race-based eligibility rules violate the Constitution.
That includes programs for Hispanic-Serving Institutions, Predominantly Black Institutions, and schools serving Asian American, Native Hawaiian, and Native American students. In total, we’re talking about $350 million in 2025 funding that was earmarked for these programs. Now? It’s getting rerouted to other initiatives that don’t rely on racial checkboxes to determine worth.
Here’s What Changed
The decision follows a July ruling from the U.S. Solicitor General, who said the Hispanic-Serving Institutions (HSI) program “violates the equal-protection component of the Fifth Amendment’s Due Process Clause.” Translation? The DOJ won’t defend these programs in court anymore — because they don’t think they’ll win.
Secretary of Education Linda McMahon didn’t mince words:
“Discrimination based on race or ethnicity has no place in this country. Stereotyping someone by their skin color ignores their grit, merit, and individuality. That’s not how we do things — or at least, not anymore.”
According to McMahon, the Department wants to work with Congress to redesign these programs around actual need — not race. Think underfunded schools, underprepared students, underserved communities. That’s the new north star.
Programs Getting the Axe (for Discretionary Funds)
The following grant programs are now ineligible for new or continued discretionary funding:
Strengthening Alaska Native and Native Hawaiian-Serving Institutions
Strengthening Predominantly Black Institutions
Strengthening Asian American- and Native American Pacific Islander-Serving Institutions
Strengthening Native American-Serving Nontribal Institutions
Minority Science and Engineering Improvement
Developing Hispanic-Serving Institutions
Promoting Postbaccalaureate Opportunities for Hispanic Americans
Grant applicants are being notified that no new awards are coming in FY 2025. Ongoing awards? Not renewed. The Department is closing the book.
What’s Still Funded?
Around $132 million in mandatory funding (Congress-approved) will still flow to some of these same institutions through Title III and Title V programs. Why? Because by law, those funds can’t be redirected — at least, not yet. But the Department says they’re reviewing the legal framework behind even those.
The Bigger Question
How did we get here?
The Higher Education Act of 1965 built these programs to give a leg up to historically excluded groups — but the execution has relied on hard racial thresholds. Some examples:
50% minority enrollment required for science/engineering funding
40% Black enrollment required for PBI programs
25% Hispanic enrollment for HSI grants
Quotas as low as 10-20% for Native Hawaiian, Alaska Native, and Pacific Islander programs
In today’s legal climate, that kind of language is a lawsuit waiting to happen — and the Biden administration is opting to walk away instead of fight.
Bottom line:
This isn’t just a policy shift — it’s a political earthquake in the education funding world. The Department of Education is rethinking how equity is defined… and they’re betting the courts will back them up.
What does this mean for students and schools who counted on these grants?
What does “equal protection” look like in a country still grappling with unequal realities?
Those are the uncomfortable questions nobody wants to ask — but they’re coming whether we like it or not.