Currently, 1 in 5 higher education institutions are designated as minority-serving institutions (MSIs), enrolling significant percentages of students of color or established and funded by Congress through the Higher Education Act (HEA) and various federal programs specifically to provide higher education opportunities to certain student groups. Collectively, these institutions enroll 4.8 million students — more than 25% of all undergraduate students and half of all undergraduate students of color in the U.S — and that number is expected to grow.

These institutions not only educate students of color; they also disproportionately invest in students from low-income backgrounds. Nearly half of all students at MSIs are the first in their families to attend college and are Pell Grant recipients. In 2012, roughly 98% of Black students at historically Black colleges and universities (HBCUs) and Indigenous students at tribally controlled colleges and universities (TCCUs) qualified for federal need-based aid.

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MSIs Are Underfunded

While a significant number of higher education institutions are designated as MSIs, many are often underfunded compared to their non-MSI counterparts. A comparison of per-pupil state funding at the nation’s 18 public land-grant HBCUs in the South versus their predominantly white land-grant school counterparts over the last three decades found that these HBCUs have been underfunded by an aggregate of $12.8 billion.

HBCUs have been underfunded by an aggregate of $12.8 billion.

A study of federal and state revenue per full-time-equivalent (FTE) student at MSIs versus non-MSIs also found that four-year MSIs receive less revenue per FTE student than four-year non-MSIs. As of FY 2010, the total revenue difference (including education and general expenditures minus auxiliaries and other expenses) was $13,185 per FTE student between four-year MSIs and their non-MSI counterparts.

MSIs Produce the Most College Graduates of Color

Despite chronic federal and state underinvestment in these institutions, HBCUs, TCCUs, and MSIs play a major role in ensuring the success of students of color and significantly contribute to local and national economies. In 2014 alone, HBCUs accounted for only 3% of public and nonprofit private institutions receiving federal student aid yet were responsible for 17% of all bachelor’s degrees earned by Black Americans and 24% of degrees earned by Black Americans in STEM fields. As of 2014, the 50,000-plus HBCU graduates could collectively expect to earn $130 billion over their lifetimes — 56% more than they could expect to earn without their college credentials. Meanwhile, the nation’s HBCUs generate $14.8 billion in annual economic impact — equivalent to a rank in the top 200 on the Fortune 500 list of America’s largest corporations. They also generate 134,090 jobs annually for their local and regional economies. Similarly, in 2019-2020, Hispanic-serving institutions (HSIs) represented only 18% of all colleges and universities yet produced over half of the Latinos who earned college degrees during that period.

Hispanic-serving institutions (HSIs) represented only 18% of all colleges and universities yet produced over half of the Latinos who earned college degrees.

In 2018, Asian American and Native American Pacific Islander-serving institutions (AANAPISIs) represented only 5% of all colleges and universities yet were responsible for half of all AAPI associate degrees and a quarter of all AAPI bachelor’s degrees.

Updating Titles III & V of the Higher Education Act

Although federal investments in MSIs under Titles III and V of the HEA recognize the contributions of these institutions and the need for “equalizing educational opportunity” for students of color and students from low-income backgrounds, federal and state underfunding has persisted, and Titles III and V of HEA haven’t been revised since their inception.

It’s time they were updated. Legislative and administrative revisions to strengthen support for the nation’s MSIs are urgently needed, given the growing enrollment of students of color in college and the subsequent rise in institutions meeting MSI enrollment thresholds, not to mention the heightened needs of students and institutions in the wake of the pandemic, the Supreme Court’s ban on affirmative action in college admissions, and state legislation defunding and banning college access and success initiatives that support students of color on college campuses.

With that in mind, EdTrust researchers interviewed practitioners and leaders at federally designated MSIs to learn how Congress and the U.S. Department of Education (ED) could update the HEA to better serve students of color and those from low-income backgrounds at MSIs. Participants were asked to consider how they would amend Titles III and V to better meet the needs of 21st-century students. They were also asked to consider how COVID-relief funds provided to higher education institutions at the start of the pandemic impacted students and institutions and whether that funding legislation could be a model for additional investment in the nation’s MSIs.

8 Insights on How to Update the HEA

1. Competitive Title III/V funding for enrollment-based MSIs does not account for institutional diversity (type, size, and location) within MSI designations, and funding varies by enrollment-based MSI designation.
2. Allowable activities for Title III/V funding are broad, but there is room to include additional activities based on current student needs, heightened by the COVID-19 pandemic.
3. A growing number of higher education institutions meet multiple MSI designations.
4. There is a time lag between the dispersal of Title III/V funds by the U.S. Department of Education and program implementation at higher education institutions.
5. Federally mandated Annual Performance Reports (APRs), program evaluation plans, and U.S. Department of Education site visits have room for improvement.
6. Use of Title III and V funds for establishing or increasing institutional endowments is limited.
7. Title III and V funding is insufficient to cover all project costs, and some Title III/V projects aren’t institutionalized.
8. Title III formula funding is crucial for HBCUs and TCCUs but insufficient to meet their broader physical and technological infrastructure needs.

7 Recommendations

Based on these insights, EdTrust developed recommendations for Congress and ED to update Titles III and V. We asked interview participants, MSI scholars, and advocates from academia, policy organizations, associations, and special interest groups to provide feedback on these recommendations. Additionally, we met with members of ED to learn more about the department’s Title III and Title V program implementation as we drafted these policy recommendations. ED’s comments are reflected in this report.

Here are seven policy recommendations for updating Titles III and V of the HEA:

1. Congress should increase annual Title III and V program funding for HBCUs, TCCUs, and MSIs. Funding for HBCUs and TCCUs, which have unique missions, and funding for enrollment-based MSI programs should be based on different considerations.
2. The Department of Education should include program selection criteria outlining proposed institutionalization efforts for competitive Title III/V programs that do not currently include them and weigh these criteria more heavily.
3. The Department of Education should publish information about institutions that receive Title III/V competitive funding eligibility waivers.
4. The Department of Education should provide guidance to competitive Title III/V applicants on how best to include allowable activities that are not explicitly outlined in HEA Titles III and V.
5. The Department of Education should provide guidance to all Title III/V grantees about pre-award costs.
6. The Department of Education should provide additional specialized technical assistance to competitive Title III and V funding recipients to better leverage Title III/V funding for students of color.
7. The Department of Education, White House Initiatives, and all federal agencies with MSI funding opportunities should enhance efforts to help higher education institutions learn about and apply for additional federal MSI funding outside of HEA Titles III and V.