AASCU Federal Highlights – September 2025

ED Announces End to Federal Funding for Several MSI Programs

On Wednesday, the U.S. Department of Education (ED) announced it will cease discretionary funding for several Minority-Serving Institution (MSI) grant programs that rely on racial or ethnic quotas. This follows the U.S. Solicitor General's determination that such programs-specifically Hispanic-Serving Institutions (HSIs)-violate the Fifth Amendment's equal protection guarantees and that the U.S. Department of Justice (DOJ) would not defend HSIs in ongoing litigation. Citing similar constitutional concerns across all MSI programs, ED will reallocate roughly $350 million in fiscal year 2025 (FY25) discretionary funds to other initiatives that do not condition eligibility on race or ethnicity. The affected programs include the following:

• Strengthening Alaska Native and Native Hawaiian-Serving Institutions (Title III Part A);
• Strengthening Predominantly Black Institutions (Title III Part A);
• Strengthening Asian American- and Native American Pacific Islander-Serving Institutions (Title III Part A);
• Strengthening Native American-Serving Nontribal Institutions (Title III Part A);
• Minority Science and Engineering Improvement (Title III Part E);
• Developing Hispanic-Serving Institutions (Title V Part A); and
• Promoting Postbaccalaureate Opportunities for Hispanic Americans (Title V Part B).

Grantees with multiyear projects not yet in their final budget period will receive a one-year no-cost extension of the performance period of all discontinued awards, allowing them to complete approved activities and close out their programs by September 30, 2026. Additionally, grantees already in their final budget year may request a one-time extension of up to 12 months, also ending no later than September 30, 2026, to finish their work and conclude the project within the approved scope.

It is worth noting that while ED will not renew existing awards or issue new grants under these discretionary programs, it will continue distributing approximately $132 million in mandatory funds that cannot legally be reprogrammed. Secretary of Education Linda McMahon emphasized ED's commitment to eliminating race-based discrimination in federal programs and pledged to work with Congress to redesign support for under-resourced institutions without using racial quotas.

You can view AASCU's statement in response to ED's decision here. If your institution is an AASCU member and you have received a rejection, termination, or discontinuation letter from ED, please contact AASCU. We will continue to report on the status of these programs amidst ongoing litigation efforts.