PORTLAND, Ore. — Oregon universities are now grappling with the fallout of a major federal decision to withdraw funding from Minority-Serving Institutions (MSIs), cutting off millions of dollars that schools had counted on to support underserved student populations.
Western Oregon University Loses New Designation
Earlier this year, Western Oregon University (WOU) became the state’s first designated Hispanic-Serving Institution (HSI), a recognition that requires at least 25% of the student body to be Hispanic. WOU far exceeds that threshold, with 50% of its students identifying as Hispanic.
Despite meeting the criteria, WOU has been denied access to federal HSI grants due to a statutory ruling following the U.S. Solicitor General’s decision. The change eliminates an important funding stream that many school leaders hoped would strengthen programs for Hispanic students.
Portland State University’s Grant Canceled
Portland State University (PSU) has also been affected. As an Asian American and Pacific Islander-Serving Institution, PSU had been relying on a $1.9 million federal grant. University officials confirmed this week that the remaining funds have been canceled, leaving programs designed to serve those communities in jeopardy.
Federal Ruling Behind the Change
The funding cuts stem from a ruling by the U.S. Solicitor General, who determined that federal MSI programs violate the Due Process Clause of the Fifth Amendment’s equal protection principle. The argument is that by awarding grants based on racial or ethnic enrollment thresholds, the government is effectively discriminating by conferring benefits to some institutions while excluding others.
Following that interpretation, the U.S. Department of Education announced it would halt “discretionary funding” for programs tied specifically to race or ethnicity.
Who Loses Funding
The decision impacts institutions across the country, not just in Oregon. Federal funds will no longer be awarded to schools serving:
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Predominantly Black institutions
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Alaskan and Hawaiian Native institutions
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Asian American and Pacific Islander institutions
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Native American non-tribal institutions
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Developing Hispanic institutions
The cancellations affect both ongoing and future grants, placing pressure on universities that had structured student services and academic support programs around this funding.
Partial Redirect of Federal Dollars
Despite the cancellations, the Department of Education announced it will still distribute $132 million of this year’s appropriated grant money. Those funds will be redirected to strengthen some categories of institutions, including predominantly Black schools, Asian American and Pacific Islander institutions, and Native American non-tribal institutions.
The redistribution, however, leaves Hispanic-Serving Institutions like Western Oregon without access to funds they had anticipated.
Local Impact and Concerns
University officials in Oregon warn the decision could have long-term consequences for equity in higher education. Leaders at WOU and PSU said the funding supported outreach, academic advising, mentorship programs, and financial aid opportunities for first-generation students.
“This isn’t just about numbers or legal definitions,” one administrator noted. “These grants provided resources for students who often face systemic barriers to higher education. Without them, our ability to close opportunity gaps will be diminished.”
Critics of the ruling argue that eliminating targeted MSI funding will disproportionately harm the very communities it was meant to support. Supporters of the decision, however, contend that government programs should be race-neutral and avoid distributing benefits based on ethnicity.
National Backlash
The ruling has triggered a national backlash from higher education advocates, civil rights groups, and lawmakers who view the change as a rollback of decades of progress in making colleges more accessible to underrepresented students.
Oregon, with its relatively new HSI designation at WOU and established programs at PSU, has become one of the latest flashpoints in this broader debate.
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