HSIs Under Fire: DOJ Refusal Puts Equity Funding at Risk

1. HSI Program in Doubt as DOJ Refuses Defense

Hispanic-Serving Institutions (HSIs) are now vulnerable after the Department of Justice declined to defend the HSI grant program in a lawsuit asserting its 25% Hispanic enrollment threshold is unconstitutional. With roughly 600 HSIs nationwide, including many community colleges and public universities, hundreds of millions in annual funding that support first-gen, low-income, and underrepresented students are now at risk. Advocates warn this case could set a precedent that undermines all Minority-Serving Institutions (MSIs) designated under the Higher Education Act.

Key Takeaway: Institutions serving diverse students must prepare for potential funding disruptions and legal challenges to equity-focused programs.

2. The One Big Beautiful Bill Rearranges Student Loan Landscape

The One Big Beautiful Bill Act, signed July 4, 2025, overhauls federal student loans starting in 2026–27—eliminating Grad PLUS loans, capping borrowing, and restructuring income-driven repayment. A U.S. News survey revealed 61% of students expect to be impacted—with a third considering reducing their schooling, changing majors, or dropping out entirely; first-generation students are the hardest hit (45%).

Insight: It’s vital for colleges to expand financial aid guidance and communicate proactively, as the new law drives enrollment and student decision-making.

3. TRIO Programs Face Elimination, Threatening Educational Equity

The Trump administration has proposed cutting all federal funding for TRIO programs, which support nearly 870,000 low-income and first-generation students annually through services like tutoring, advising, summer bridge programs, and college prep. Research shows participants in TRIO—such as Upward Bound—are over twice as likely to earn a bachelor's degree by age 24 than similar peers, while Student Support Services increase associate completion or transfer by 48%. Though the proposal faces bipartisan opposition in Congress, the administration has also canceled about 20 previously approved TRIO grants, NPR reports.

Key Takeaway: The proposed cuts could dismantle an equity-minded educational support system; institutions must mobilize advocacy and consider contingency plans for affected students.

4. Community College Onboarding Gaps Prompt Pre-Enrollment Drop-Offs

A new EAB survey of 1,000 community college students finds that 56% nearly dropped out before classes began, citing delays, unclear major paths, financial strain, and a weak sense of belonging. Students expect rapid responses—with 73% wanting replies within a day—yet many wait over a week, pointing to institutional capacity issues. Colleges using technology-enhanced, proactive onboarding strategies have seen notable gains in enrollment and tuition revenue

Quick Insight: Enhancing communication and support during pre-enrollment can significantly boost student persistence and institutional yield.

5. Embedding Career Readiness for Online and Non-Traditional Learners

A July report from SNHU’s Center for Higher Education Policy and Practice spotlights the need to embed career preparation into learning experiences for online and adult learners—many of whom juggle work, parenting, and financial pressure. These nontraditional students often bypass traditional career centers, leaving them disconnected from opportunities postgraduation. Recommendations include workforce-aligned curricula, flexible advising, and remote career exploration to better link classroom learning with career pathways.

Key Takeaway: Administrators should reimagine career support models to reach students outside the traditional college mold.

Published: September 2, 2025