Department of Education Cancels $350M in MSI Grants — Impact on HBCUs

The U.S. Department of Education has announced it will cut $350 million in discretionary grant funding for minority-serving institutions (MSIs), sparking outrage and concern over how the decision could impact Historically Black Colleges and Universities (HBCUs).

Education Secretary Linda McMahon’s office explained that the funding cuts are tied to eligibility rules requiring institutions to have certain percentages of students from specific racial or ethnic backgrounds. The Department now considers those rules unconstitutional, calling them discriminatory quotas.

What programs are affected?

The grants being cut are not small change. They include federal support for:

    •    Predominantly Black Institutions (PBIs)

    •    Hispanic-Serving Institutions (HSIs)

    •    Asian American and Native American Pacific Islander-Serving Institutions (AANAPISIs)

    •    Alaska Native and Native Hawaiian-Serving Institutions

    •    Native American-Serving Nontribal Institutions

    •    Minority Science and Engineering Improvement programs

For years, these programs have funded everything from science labs and tutoring centers to faculty training and curriculum development. Colleges often rely on them to support first-generation and low-income students.

What’s left?

Not all money is disappearing. About $132 million in mandatory funding is still locked in by law, so some MSIs will continue receiving limited support. But the discretionary $350 million, which gave campuses flexibility to grow programs and meet urgent needs, is gone.

Why it matters for HBCUs

While HBCUs aren’t being explicitly “targeted” in this decision, advocates say the ripple effects are clear. Many HBCUs already operate with smaller endowments than predominantly white institutions, leaving them more dependent on federal grants to cover resources, faculty support, and infrastructure upgrades.

Taking away discretionary funding could force some schools to scale back services or halt programs that help keep students enrolled and on track to graduate. Leaders warn that this move deepens long-standing inequities in higher education.

For now, schools are bracing for what could be a tough year ahead; especially HBCUs, which have long fought to close funding gaps.