Congress Gave MSIs Funding, but Uncertainty Looms

Minority-serving institutions find themselves caught in an uncomfortable limbo.

Congress appropriated funding for MSI grant programs for the current fiscal year, including small increases for most, in the budget enacted earlier this month. But the legislation also leaves some room for the Trump administration to move the money around after government officials repeatedly signaled they’re against doling out the funds.

That puts the upward of $400 million Congress allocated for MSIs and other related programs at risk. Minority-serving institutions already lost hundreds of millions of dollars when the Education Department refused to give out discretionary grants to certain types of MSIs in September, arguing they amounted to “discrimination.” The money was then redirected to tribal colleges and historically Black colleges and universities. Hispanic-serving institutions, predominantly Black institutions and others scrambled to fund programs and student services supported by the grants, and some were forced to lay off personnel.

Although the latest federal budget prevents the Trump administration from shifting MSI funds to tribal colleges and HBCUs again, the language of the bill does seem to technically allow the department to move MSI funding across other programs in Title III and Title V of the Higher Education Act, including the Strengthening Institutions Program, a capacity-building grant for underresourced colleges that serve high numbers of low-income students.

That leaves minority-serving institutions facing fresh uncertainty. They’re poised to access routine federal dollars appropriated by Congress but unsure if, when or how the administration will dole them out. As a result, MSIs and their allies are having difficult conversations about whether to fight for the appropriated funds—if ED attempts to get rid of the grants again—or whether to explore alternative sources of federal money, at least while Trump remains in office. Some are gearing up to do both.

Deborah Santiago, CEO of Excelencia in Education, an organization focused on Latino student success, believes MSIs are unlikely “to give up on the potential that there might be the distribution of these resources.”

At the same time, “I don’t think institutions feel confident about how it’s going to go,” she said. “The unpredictability is part of what they know to expect from this administration.”

A Controversial Alternative

Some higher ed experts suspect the Trump administration might reroute MSI funds to the Strengthening Institutions Program. But the possibility prompts mixed reactions.

SIP doesn’t have any race-related criteria or “involve race or ethnicity in any shape or form,” so the Trump administration is unlikely to take issue with the program, Santiago said.

And MSIs, in theory, could vie for these grants if their own grant competitions were axed. Institutions qualify for SIP if they have low expenditures and serve a significant share of students who rely on Pell Grants or at least half of their students receive federal financial aid. Those are easy benchmarks for MSIs to clear—most minority-serving institutions are required to enroll at least half low-income students and to have low per-student expenditures to qualify for MSI grants.

Carrie Warick-Smith, vice president for public policy at the Association of Community College Trustees, said it’s unclear whether Congress intended for the Trump administration to create a “supersized SIP.” The appropriations bill offers “mixed messaging” by increasing funds to individual MSI programs while also giving the administration “a great deal of flexibility” on how to manage funds in the text of the legislation, including the opportunity to move MSI funds to SIP.

“Do they think the administration is going in that direction? Are they trying to nudge them in that direction?” Warick-Smith said. “If you were to say, ‘Well, what do you think the Congress that voted on this appropriations bill wants the administration to do?’ I’m not sure that everyone who voted for the bill has the same answer.”

Regardless of whether it’s favored by lawmakers, an enlarged SIP would be a controversial move, according to MSI advocates.

Antonio Flores, president of the Hispanic Association of Colleges and Universities, said he’s all for extra SIP money, but not in lieu of MSI funding. SIP is open to institutions without MSI status, so MSIs would be competing for limited funds in a larger pool of applicants.

HACU is “pushing very hard” for MSI funding to remain intact and encouraging its member institutions to stress to lawmakers, on both sides of the aisle, how critical HSI funding is to institutions in their regions and how these colleges support all students, he said.

Emmanual A. Guillory, senior director of government relations at the American Council on Education, said ACE’s Strengthening Institutions Program Roundtable, which includes associations representing historically Black colleges, tribal colleges and other minority-serving institutions, also opposes the move amid “rumors” the Trump administration is considering an expanded SIP.

“Collectively as a group, we are supportive of funding for one another, and so we hope that the department will carry through on grant competitions for these programs individually as they deserve,” Guillory said.

He stressed that SIP and MSI grant programs fulfill different missions.

“It’s important that we remember the reasons why these programs were created … in the first place,” he said. “We want to make sure that institutions that do enroll a certain percentage of students that are from a disadvantaged background, a minority background, are able to have the resources needed to … ensure that they persist and complete their education at the end of the day.”

Congress must not believe the MSI programs and SIP are interchangeable, either, said Amanda Fuchs Miller, former deputy assistant secretary for higher education programs in the Biden administration and now president of the higher ed consultancy Seventh Street Strategies. Otherwise, Congress wouldn’t have funded both MSI grants and SIP for roughly three decades, including in fiscal year 2026 with a Republican-controlled Congress.

Warick-Smith said ACCT’s top priority is securing capacity-building funding for community colleges, and it’s possible an enlarged SIP would accomplish that. But any time program requirements shift around, it complicates the process, “and you’re going to see colleges get dollars who otherwise wouldn’t have, and you’re also going to see colleges who regularly rely on dollars not receiving them.” (The grant programs are also moving to other federal agencies, which could further complicate the grant cycle for this fiscal year.)

She said ACCT is trying to strike a balance.

“We’re trying to be supportive of the field as a whole but also make sure that these investment dollars keep flowing,” she said. “We’re trying to keep open dialogue across the field and also with Congress and the administration. We don’t want to be in a position where we’re pitting different parts of the field against each other. I don’t think that helps students or any colleges over all.”

Whether or not the administration moves MSI funds over to SIP, colleges are left in the lurch because—five months into the fiscal year—they don’t know which programs they’ll be able to apply for or when. Normally, the Education Department would have already launched a process by which MSIs can verify their eligibility for MSI grants or apply for eligibility, but that annual process hasn’t happened yet.

“There is great urgency in the resolution of this situation for campuses,” said David Baime, senior vice president for government relations at the American Association of Community Colleges both “so that they can plan to compete for funding if there’s a competition and to find resources to replace lost resources if that’s necessary.”

MSIs Repositioning

Some MSIs are also looking beyond the Education Department for support.

Manuel Del Real, executive director of HSI initiatives and inclusion at Metropolitan State University of Denver, said he’s urging his institution to think creatively about new funding options for programs and projects, whether that means seeking foundation money or applying for research dollars from federal agencies, such as the National Science Foundation.

He said he’s encouraging staff and faculty members to ask themselves what federal agencies are “looking for now” or how their work might align with foundations’ strategic plans. He’s also offering them grant-writing support if they need.

“That way, you can look at the data, you can look at some of your projects and reword your application to fit the abstract and what they’re looking for,” Del Real said.

Guillory noted that federal agencies beyond the Education Department offer designated funds for MSIs, so those pots could help supplement lost funds, but it’s unclear whether those streams of funding will continue after the Justice Department issued a December legal report that deemed funds for MSIs “unconstitutional.”

Mike Muñoz, president of Long Beach City College, said he believes it’s important to both fight for the funding Congress allocated HSIs and consider alternatives.

The Hispanic-serving institution in California lost about $3 million in grants that supported its CASA program, designed to shore up resources for students with food and housing insecurity at the community college, and its PASO program, which funds additional counseling, advising and other supports for adult learners. Muñoz managed to cobble together state funds to cover these programs for the next fiscal year, but the financial landscape beyond that is “very unclear.”

“Unequivocally, from my perspective, I think we do need to continue to fight” for allocated funding, he said. “At the same time, if that pathway no longer exists, I think we should still continue to try to work with the Department of Ed, or at least our advocacy organizations, to try as much as possible to … preserve those funds for community colleges,” whether that’s from MSI funding or other sources. “For me, it’s not an ‘or.’ It’s a ‘yes, and.’”