Trump administration halts $350M in minority college grants: Is this the end of race-based funding in education?

For decades, America’s higher education system has sought to bridge racial inequities through targeted funding. Minority-serving colleges, from Hispanic-Serving Institutions in Texas to Black-serving community colleges across the South, relied on federal support to expand classrooms, hire faculty, and help first-generation students find their footing.Now, that scaffolding is being pulled back. In a sweeping shift that upends nearly three decades of precedent, the Trump administration has announced it will end $350 million in federal grants reserved for colleges with large numbers of minority students, arguing that such programs amount to unconstitutional racial quotas.

A precedent undone

The Education Department said Wednesday it now considers it unlawful to award grants based on racial or ethnic enrollment thresholds, Associated Press reported. The agency has frozen all discretionary funding budgeted for this year, calling on Congress to “reenvision” how support should be structured in the future.At the center of the rollback is the Hispanic-Serving Institution (HSI) program, which Congress created in 1998 after finding Latino students were enrolling and graduating at far lower rates than white peers. More than $250 million in grants had been set aside for HSIs this year alone.Smaller streams, including $22 million for colleges where at least 40% of students are Black, as well as programs tied to Asian American, Pacific Islander, or Native American enrollment, are also being cut.

Notably, funding for Historically Black Colleges and Universities remains untouched, since those institutions are legally open to all students regardless of race.

“Diversity is not merely skin color”

Education Secretary Linda McMahon defended the decision, arguing that tying money to ethnicity reinforces stereotypes.“Diversity is not merely the presence of a skin color,” McMahon said in a statement Wednesday, according to AP. “Stereotyping an individual based on immutable characteristics diminishes the full picture of that person’s life and contributions, including their character, resiliency, and merit.”Instead, she pledged to work with Congress on redirecting the $350 million toward institutions serving “underprepared or under-resourced” students, but offered no details on what that would look like.

The legal and political battleground

The rollback is already entangled in court. Tennessee and Students for Fair Admissions, the anti-affirmative action group, have challenged the HSI grants, claiming they unfairly exclude universities that fall short of the “arbitrary ethnic threshold.”In July, the Justice Department declined to defend the programs, saying the 25% enrollment requirement violates the Constitution.More than 500 colleges and universities, including flagship institutions like the University of Texas at Austin and the University of Arizona, are currently designated as HSIs. Their defenders argue the grants have been pivotal in leveling the playing field.“The grants are legal and necessary,” a national association of HSIs argued in court filings, warning that stripping them away risks undoing years of progress.

Backlash in Congress

Democrats swiftly condemned the move. Senator Patty Murray, D-Wash., accused Trump of “putting politics ahead of students simply looking to get ahead.”“This is another important reminder of why Congress needs to pass funding bills … that ensure Congress, not Donald Trump or Linda McMahon, decides how limited taxpayer dollars are spent,” Murray said in a statement cited by AP.The Education Department said about $132 million will still flow to similar programs considered mandatory by law, but it also signaled that “underlying legal issues” with those programs are under review.

A sharp reversal from Biden era

The cuts also represent a sharp break from the Biden administration. Just last year, President Joe Biden signed an executive action elevating Hispanic-serving institutions with a new advisory board and promises of increased funding.Trump revoked that order on his first day back in office earlier this year.

What’s at stake

The administration frames its decision as a defense of merit and constitutional fairness. Critics see it as dismantling one of the most effective tools to close racial gaps in higher education.The real question is not just whether race can be a factor in distributing funds, but what happens to the students who relied on these programs. For colleges where tuition margins are razor-thin and graduation rates already lag, the disappearance of $350 million isn’t an abstraction. It’s a classroom without a tutor, a lab without equipment, a student without a scholarship.America has long wrestled with how to reconcile equality of opportunity with equity of outcome. Trump’s decision throws that debate back into the spotlight, and raises a pressing question for Congress: if not through race-based funding, then how will the nation invest in the communities that have been left behind?