An article from Dive Brief Tennessee and SFFA sue over funding for Hispanic-serving institutions

The U.S. Department of Education’s longtime HSI grant program undercuts equal opportunity and is discriminatory, the state and advocacy group argued.

Published June 12, 2025 Laura Spitalniak Editor

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Edward Blum, a longtime opponent of affirmative action in higher education and founder of Students for Fair Admissions, leaves the U.S. Supreme Court on Oct. 31, 2022, in Washington, D.C. Chip Somodevilla / Staff via Getty Images Listen to the article 6 min This audio is auto-generated. Please let us know if you have feedback. Dive Brief:

• The state of Tennessee and Students for Fair Admissions sued the U.S. Department of Education Wednesday over allegations the agency's decades-long practice of designating federal grant funding for Hispanic-serving institutions is unconstitutional.
• The plaintiffs argued that the department's eligibility requirements for HSI grants are discriminatory and undercut opportunities for all students, including those who are Hispanic and attend colleges that aren’t HSIs. To qualify as an HSI, a college must be nonprofit and enroll a full-time undergraduate student body that is at least 25% Hispanic.
• Asserting that all colleges serve Hispanic students, Tennessee and SFFA are asking the federal court to strike down the HSI grant program’s ethnicity-based requirements and allow all institutions to apply for the grants "regardless of their ability to hit arbitrary ethnic targets."

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Edward Blum, president of SFFA, said the advocacy organization is suing to ensure equal opportunity for all, not "denying opportunity to any racial or ethnic group." SFFA successfully challenged race-conscious admissions before the U.S. Supreme Court, getting the practice banned in 2023.

“This lawsuit challenges a federal policy that conditions the receipt of taxpayer-funded grants on the racial composition of a student body," Blum said in a statement Wednesday. "No student or institution should be denied opportunity because they fall on the wrong side of an ethnic quota.”

HSI is a designation first established in 1992 as part of the Higher Education Act, and the federal government began distributing funds to qualifying institutions three years later.

The Education Department's HSI division exists to distribute grant funding to "expand the educational opportunities for Hispanic Americans and other underrepresented populations," according to its website.

Though a majority of states have at least one HSI, the institutions are clustered in areas with higher Hispanic populations.

Seven states — California, Texas, New York, Illinois, Florida, New Mexico and New Jersey — and Puerto Rico are home to 81% of HSIs, according to an analysis of federal data by the Hispanic Association of Colleges and Universities.

The Hispanic and Latino population is one of the fastest-growing minority groups in the country. In 2023, 65.2 million Hispanic and Latino people lived in the U.S., accounting for nearly a fifth of the population. The Hispanic population is expected to grow to roughly a quarter of the U.S. population by 2060, according to federal data.

In Tennessee, Hispanic students made up just over 8% of undergraduates in the 2023-24 academic year, according to HACU. The state has just one HSI — Southern Adventist University, a private nonprofit. 

No public Tennessee college qualifies for HSI funding, despite all serving some population of Hispanic students, state officials said in Wednesday's lawsuit. This puts public college students at a disadvantage and harms the institutions, they argued.  

Tennessee Attorney General Jonathan Skrmetti alleged that the HSI grant system "openly discriminates against students based on ethnicity."

"The HSI program perversely deprives even needy Hispanic students of the benefits of this funding if they attend institutions that don’t meet the government’s arbitrary quota," he said in a Wednesday statement.

Both Skrmetti and Blum invoked the 2023 Supreme Court ruling on race-conscious college admissions in their statements. Blum argued the court "made clear" that federal funding practices like the HSI grant program are "patently unconstitutional."

That interpretation of diversity-focused federal funding has yet to be tested judicially. The high court's 2023 decision only addressed admissions practices. But since then, conservative policymakers and those opposed to diversity initiatives have sought to apply it to a wide range of college affairs, including scholarships and diversity programs for students.

Now, they are turning their attention to a long-standing federal program through this lawsuit, filed in U.S. District Court in Tennessee.

The Education Department did not immediately respond to a request for comment Thursday. 

However, the department under Trump has already sought to apply the Supreme Court's 2023 ruling against Harvard University and the University of North Carolina to diversity, equity and inclusion efforts at federally funded institutions. In February, the agency threatened to pull all funding from colleges and K-12 schools that considered race in their programs and policies. 

The department quickly faced lawsuits over the guidance, and it issued a Q&A "to provide clarity" the following month. The document softened the agency's initial stance, though officials still struck a strident tone. Regardless, a federal judge in April blocked the Education Department from enforcing either document.

On the first day of his second term, President Donald Trump issued an executive order repealing a Biden-era initiative aimed at boosting educational access via Hispanic-serving institutions. Among several goals, that program sought to expand the educational capacity of Hispanic-serving institutions through federal support. 

Trump's order — which revoked dozens of Biden-era executive actions — described the repealed policies as a move to "restore common sense" in the federal government.

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