When the Grants Disappear, So Does the Mission MSI funding, institutional priorities, and the coming test of “social mobility” (Glen McGhee)

A recent opinion from the Department of Justice’s Office of Legal Counsel declares that federal Minority-Serving Institution (MSI) programs are unlawful because they allocate funding based on the racial composition of enrolled students. The ruling immediately throws hundreds of campuses—and the students they serve—into uncertainty. But beyond the legal debate lies a more revealing institutional reckoning: if MSI grants disappear, will colleges actually fund these programs themselves?

The short answer, based on decades of evidence, is no.

For years, colleges and universities have framed MSI grants as proof of their commitment to access, equity, and social mobility. Yet those commitments have always been conditional. They have depended on external federal subsidies rather than first-principles institutional priorities. Now that the funding stream is threatened, the gap between rhetoric and reality is about to widen dramatically.

The scale of what is being cut is not trivial. Discretionary MSI programs—serving Hispanic-Serving Institutions (HSIs), Asian American and Native American Pacific Islander–Serving Institutions (AANAPISIs), Predominantly Black Institutions (PBIs), and others—have collectively provided hundreds of millions of dollars annually for tutoring, advising, counseling, faculty development, and basic academic infrastructure. These grants have often been the difference between persistence and attrition for low-income students, many of whom are first-generation and Pell-eligible.

Yet MSI funding has also sustained something else: a sprawling administrative apparatus dedicated to grant writing, compliance, reporting, assessment, and “outcomes tracking.” Entire offices exist to chase, manage, and justify these funds. This is the professional-managerial class infrastructure that has come to dominate higher education—highly credentialed, compliance-oriented, and deeply invested in external funding streams.

Follow the money, and a pattern becomes clear. When federal or state funding declines, colleges do not trim administrative overhead. They cut instruction. They cut tutoring. They cut advising. They cut student-facing programs that lack powerful internal constituencies. Administrative spending, by contrast, is remarkably durable. It rarely shrinks, even in moments of fiscal crisis.

We have seen this movie before. When state appropriations fell over the past decade, public universities raised tuition and reduced instructional spending rather than dismantling administrative layers. When DEI offices were banned or defunded in several states, institutions eliminated student services and laid off staff, then quietly absorbed the savings into general operations. There was no surge in faculty hiring, no reinvestment in instruction, no serious attempt to replace lost support with institutional dollars.

MSI grants will follow the same path. Colleges may offer short-term “bridge funding” to manage optics and morale, but that support will be temporary and partial. The language administrators use—“assessing impacts,” “exploring alternatives,” “seeking private donors”—is a familiar signal that programs are being triaged, not saved.

Could institutions afford to self-fund these programs if they truly wanted to? In most cases, no—or at least not without making choices they refuse to make. Endowments are largely restricted and already used to paper over structural deficits. Tuition increases are politically and economically constrained at campuses serving low-income students. Federal aid flows through institutions but cannot be repurposed for operations. There is no hidden pool of fungible money waiting to be redirected.

What would replacing MSI funding actually require? Cutting administrative spending. Reducing executive compensation. Scaling back amenities and non-instructional growth. Reprioritizing instruction and academic support over branding and “customer experience.” These are choices institutions have consistently shown they will not make.

This is why the rhetoric of social mobility rings hollow. Colleges celebrate access and equity when the costs are externalized—when federal grants pay for the work and compliance offices manage the paperwork. But when that funding disappears, so does the institutional courage to sustain the mission.

The contrast with historically Black colleges and tribal colleges is instructive. Their core federal funding survives precisely because it is tied to historical mission rather than contemporary enrollment metrics, and because these institutions have long-standing political champions. That distinction exposes the truth: what is preserved is not equity, but power.

The coming months will bring program closures, staff layoffs, and diminished support for the students MSI grants were designed to serve. What we will not see, despite solemn statements and carefully worded emails, is a widespread commitment by colleges to fund these programs themselves.

The test is simple and unforgiving. If social mobility were truly a foundational principle of higher education, institutions would treat MSI programs as essential—not optional, not grant-contingent, not expendable. They would pay for them out of their own budgets.

They won’t.

And in that refusal, the performance ends. The mission statements remain, but the money moves elsewhere.

Sources

Inside Higher Ed, “DOJ Report Declares Minority-Serving Institution Programs Unlawful,” December 22, 2025.

U.S. Department of Justice, Office of Legal Counsel, Opinion on Minority-Serving Institution Grant Programs, 2025.

U.S. Department of Education, Title III and Title V Program Data, Fiscal Years 2020–2025.

Government Accountability Office, Higher Education: Trends in Administrative and Instructional Spending, various reports.

Delta Cost Project / American Institutes for Research, Trends in College Spending, 2003–2021.

State Higher Education Executive Officers Association (SHEEO), State Higher Education Finance Reports, 2010–2024.

University of California Office of the President, California State Auditor Reports on Administrative Spending and Reserves.

Texas Higher Education Coordinating Board; Florida Board of Governors; UNC System Office, public records and budget documents on DEI office eliminations, 2024–2025.

Bloomberg News and Associated Press reporting on DEI bans and campus program closures, 2024–2025.

National Center for Education Statistics (NCES), IPEDS Finance and Enrollment Data.

American Council on Education, Endowment Spending and Restrictions in Higher Education.

IRS Form 990 filings and audited financial statements of selected public and private universities.

Columbia University public statements on federal research funding disruptions, 2025.

University of Hawaiʻi system communications on federal grant losses and bridge funding, 2025.

Congressional Budget Justifications, U.S. Department of Education, FY2025–FY2026.

Ehrenreich, Barbara and John, The Professional-Managerial Class, and subsequent scholarship on administrative growth in higher education.

Student Borrower Protection Center, Student Debt and Institutional Finance, 2024–2025.