ED Gives Institutions Two Weeks to Comply with New Nondiscrimination Obligations or Risk Losing Federal Funding
By Hugh T. Ferguson, NASFAA Managing Editor , Megan Walter, Senior Policy Analyst
The Trump Administration, in a Dear Colleague letter sent over the weekend, has signaled its intent to withhold federal funding from institutions that it determines “have discriminated against students on the basis of race.”
The announcement underscores the potential consequences for students who rely on financial aid to access and afford higher education. The announcement, issued by the Department of Education’s (ED) Civil Rights Office comes on the heels of the 2023 Supreme Court ruling, which effectively ended affirmative race-conscious admission practices at colleges and universities. The ruling prompted institutions to reassess their diversity efforts and explore alternative methods to maintain inclusive campuses.
“When the Supreme Court ruled in 2023 on the use of race in college admissions, NASFAA reaffirmed its commitment to helping our member institutions fully uphold their missions and values while remaining in full compliance with the law. That commitment remains unchanged,"said Beth Maglione, NASFAA’s interim president and CEO. “We are actively working with policymakers, colleges, and our peers in the higher education community to understand how the Trump administration’s new interpretation of the SCOTUS ruling may impact student financial aid. Since the ruling, legal experts have debated whether it can be interpreted to apply to financial aid and scholarships, with no clear resolution; we expect that debate to continue.”
While the details of how the administration would implement this policy remain unclear, any effort to revoke federal funding from institutions could have serious ramifications for student aid programs, including Pell Grants, federal student loans, and work-study opportunities, jeopardizing access to higher education for millions of students.
The letter goes on to outline ED’s interpretation of existing federal law and says it will focus on policies and programs related to, “hiring, promotion, compensation, financial aid, scholarships, prizes, administrative support, discipline, housing, graduation ceremonies, and all other aspects of student, academic, and campus life.”
The department said it would provide additional legal guidance “in due course.”
ED also noted that it would assess compliance with antidiscrimination requirements within 14 days of the letter’s publication and reminded institutions that compliance is a condition of federal funding.
“What we do know, however, is that 14 days is insufficient time for schools to assess and implement any necessary changes to be in compliance,” Maglione said. “The last thing students need when making plans about how to pay for college is uncertainty over when or whether they will receive financial aid they’ve been relying on.”
The letter outlines three steps that educational institutions should consider when assessing their compliance with antidiscrimination requirements:
- ensure that their policies and actions comply with existing civil rights law;
- cease all efforts to circumvent prohibitions on the use of race by relying on proxies or other indirect means to accomplish such ends; and
- cease all reliance on third-party contractors, clearinghouses, or aggregators that are being used by institutions in an effort to circumvent prohibited uses of race.
“All students are entitled to a school environment free from discrimination. The Department is committed to ensuring those principles are a reality,” the letter continues.“The Department will vigorously enforce the law on equal terms as to all preschool, elementary, secondary, and postsecondary educational institutions, as well as state educational agencies, that receive financial assistance.”
Higher education institutions and advocacy groups will likely contest any measures that threaten access to federal aid, citing concerns over Title IV eligibility, the HEA, and potential violations of students’ rights.
With the ongoing uncertainty, institutions and students should remain informed about federal policy developments. “For schools with questions about their institutional aid programs, we recommend a consultative approach: engage with institutional counsel, stay alert for additional guidance from the Department of Education, and adhere to any mandates issued by your state attorney general,” Maglione said.
NASFAA will continue to provide guidance and updates as this situation unfolds.
Publication Date: 2/18/2025
Armand R | 2/18/2025 5:45:41 PM
Its time to close the chapter on victimhood and entitlement in America - ideologies pushed on us for far too long by Marxists trying to destroy the country from within (remember Nikita Khrushchev's words: "We will take America without firing a shot ... we will bury you!").
Thomas Sowell grew up poor. He is now one of America's most brilliant economists. He worked hard and earned his position as one of America's most respected economists and philosophers. An example of meritocracy over entitlement and the victim mentality.
Peter G | 2/18/2025 2:20:23 PM
"it will focus on [broadly extensive list of things]"
David J | 2/18/2025 12:12:55 PM
So, according to the "logic" reflected in this USED Dear Colleague Letter if you run a college access program (or any other education program) that gets federal funds and targets low-income students, you are in violation based on the fact that people of color are over-represented in low-income populations because low-income status would be functioning as a proxy for race. The same goes for SAT test optional policies at colleges. (Not to mention that the test themselves may have their own biases.) This is clearly government over-reach, illogical, inconsistent with the SCOTUS decision, and illegal. RESIST!
David S | 2/18/2025 9:54:24 AM
I'm not an attorney, but...
The SCOTUS decision was ONLY about admissions, and was limited in its scope. The Chief Justice said after the decision was reached that nothing in it even prohibited schools from considering a student's comments, such as in an essay, about issues they've faced and obstacles they've had to overcome as a result of being a minority, when reaching an admission decision. It certainly did not apply to financial aid, mentoring programs, social or professional organizations on campus, committees formed among students, faculty, staff, alumni, etc, to discuss issues related to race taking place on campus, in the community, in the world, in history, etc, or any other ways a school addresses the very real issues of race and ethnicity in our society. The executive branch does not have the authority to overrule such a decision reached by the judiciary branch.
And...federal funding for education, whether it be Title IV or anything else (this letter went to everything from pre-K to post-doc) is authorized under laws passed by Congress and represents money appropriated by Congress. The executive branch does not have the authority to exercise a line item veto, before, during or after the fact, to withhold such funds or require them to be returned once the legislative branch has passed them into law and a budget.
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