🎓 Understanding the Federal Funding Shift

In September 2025, the U.S. Department of Education announced a significant change in how it allocates discretionary grants under the Higher Education Act (HEA). Citing concerns over racial and ethnic quotas in eligibility criteria, the department ended approximately $350 million in funding for several Minority-Serving Institutions (MSI) programs. These included grants for Hispanic-Serving Institutions (HSIs), Asian American and Native American Pacific Islander-Serving Institutions (AANAPISIs), Predominantly Black Institutions (PBIs), and others, while boosting support for Historically Black Colleges and Universities (HBCUs) and Tribal Colleges and Universities (TCUs).

The decision stemmed from a determination that these programs violated the equal-protection clause of the Fifth Amendment by requiring institutions to meet specific enrollment thresholds based on race or ethnicity—such as at least 25% Hispanic undergraduates for HSIs. Secretary of Education Linda McMahon emphasized that true diversity focuses on individual merit rather than skin color, redirecting funds to non-quota-based initiatives serving underprepared or under-resourced students. This move provided a one-time 48% funding increase for HBCUs, totaling over $1.34 billion for fiscal year 2025, and more than doubled TCU allocations to $108 million.

While HBCUs and TCUs benefited, the cuts left a void for other MSIs, prompting states to act. California and Colorado have led with innovative legislation to sustain vital student support programs like tutoring, mentoring, and STEM pathways, which research shows boost retention and graduation rates across all demographics.

Defining Minority-Serving Institutions

Minority-Serving Institutions (MSIs) are accredited colleges and universities that primarily enroll students from underrepresented groups, providing tailored support to help them succeed in higher education. Unlike selective institutions, MSIs often serve large numbers of first-generation, low-income, and Pell Grant recipients—over 50% of MSI students receive Pell Grants, compared to lower rates elsewhere.

Key types include:

• Historically Black Colleges and Universities (HBCUs): Established before 1964 to serve Black students, now enrolling diverse populations.
• Hispanic-Serving Institutions (HSIs): At least 25% full-time undergraduate Hispanic enrollment; 615 HSIs nationwide enroll one-third of all undergrads, including 19% White students.
• Asian American and Native American Pacific Islander-Serving Institutions (AANAPISIs): Minimum 10% AAPI enrollment.
• Tribal Colleges and Universities (TCUs): Serve Native American communities.
• Predominantly Black Institutions (PBIs): At least 40% Black enrollment, not qualifying as HBCUs.

MSIs educate about 3.6 million undergraduates—20% of the total U.S. postsecondary population—often at lower tuition rates. Federal Title III and V grants have historically funded infrastructure, faculty development, and student services, with California alone receiving 70% of national HSI funding due to its 90% HSI-designated community colleges.

These institutions bridge equity gaps: Hispanic bachelor's attainment lags at 21% versus 42% for Whites, and MSI programs like dual enrollment and research fellowships have proven essential.

Campus-Level Impacts of the Cuts

The abrupt end to grants forced campuses to reassess budgets, with ripple effects on programs benefiting thousands. In California, the California State University (CSU) system lost $43 million across 19 campuses, ending initiatives like paid summer research for undergrads and STEM boot camps.

At CSU Chico, a $3 million cut halted the Destino program, which achieved 92% first-year retention (versus 86% campus average) and 63% six-year graduation for engineering and computer science students through boot camps and mentoring. Future Scholars paid undergrads for research, while Bridges to Baccalaureate supported transfers—benefits extended to all low-income students, fostering skills like data analysis used in psychology studies.

Community colleges felt acute pain: Reedley College's dual enrollment in information systems, complete with a computer lab, food pantry, and tutoring, now relies on district reserves. College of the Canyons' Project SOL served 300 STEM-aspiring students with workshops and counseling, open to all but tailored for Latinos. Nationwide, over 200 HSIs scrambled, shifting to general funds or scaling back, risking higher dropout rates among vulnerable groups.

Leaders like Chancellor Carole Goldsmith noted preparations via rainy-day funds, but sustainability remains uncertain without state aid.

Photo by Fotos on Unsplash

📈 California's Legislative Response

California, home to most HSIs, moved swiftly. Assembly Bill 2121 (AB 2121), the Defending Student Equity and Access Act, sponsored by Assemblymember Marc Berman (D-Menlo Park) and West Valley-Mission Community College District, addresses a key barrier: California's 50 Percent Law mandates half of expenditures go to instruction. Federal grants were exempt, but backfill funds weren't—AB 2121 excludes them for five years or until federal restoration, safeguarding counseling and TRIO services for 1.6 million community college students.

Companion bills include SB 1255 for a state HSI designation (five-year plans for Hispanic success) and AB 2374 for AANAPISIs. These recognize institutions serving 90% HSI community colleges, requiring outreach and accountability. Gov. Newsom's office explores state HSI grants, building on a $60 million block grant.

"When President Trump pulls the rug out, California must fight back," Berman stated, emphasizing equity. Over 440 TRIO projects ($150M annually) and 50 AANHPI programs now have breathing room.

Colorado's Forward-Thinking Designation

In Colorado, HB26-1006 proposes a "thriving institutions" label for colleges excelling in outcomes for underserved groups—Hispanics, rural, first-gen, etc. An advisory committee of experts will set standards, aiming to attract philanthropy and federal investments like NSF grants without new state dollars.

Advocates from Metropolitan State University of Denver (an HSI) and Colorado Mountain College highlight data-driven support: "We produce successful outcomes," said Yesenia Silva Estrada. This flexible model honors effective practices amid federal flux.

Congressional Restoration and Ongoing Uncertainty

Congress countered with FY2026 appropriations, restoring MSI funds with small increases despite White House requests for elimination. Bipartisan bills sustain Title III/V, but the administration's reprogramming authority lingers, fueling Senate Democrats' letters demanding reversal.

Antonio Flores of HACU notes states' workforce investments align with MSI goals, potentially filling gaps via partnerships.

Photo by Fotos on Unsplash

Future Outlook and Opportunities

State actions signal resilience: Designations foster accountability, flexible funding preserves services. Yet experts like Deborah Santiago warn states can't fully replace federal scale. MSIs' role in workforce development—closing gaps in STEM, health—demands sustained support.

For educators and students, explore higher-ed-jobs at MSIs or university-jobs nationwide. Aspiring profs can check rate-my-professor for insights.

Wrapping Up: A Call for Continued Equity

As federal policies evolve, states like California and Colorado exemplify proactive leadership, ensuring MSIs thrive. These institutions not only serve minorities but uplift all through inclusive programs. Share your experiences on Rate My Professor, search higher ed jobs or higher ed career advice, and explore university jobs. For recruitment, visit recruitment or post a job. Your voice matters—comment below on how funding impacts access.