Insights

The Department of Education (DOE) announced on September 10, 2025, that it will end discretionary funding to several Minority-Serving Institution (MSI) grant programs that, it stated, “discriminate by conferring government benefits exclusively to institutions that meet racial or ethnic quotas.”[1] The agency stated that it would “us[e] its statutory authority to reprogram discretionary funds to programs that do not present such concerns.”[2] This announcement follows a July 2025 decision by the Department of Justice to no longer defend the constitutionality of a provision of the Higher Education Act of 1965 (HEA) that authorizes grant funding to Hispanic-Serving institutions, after determining that such programs “violate the equal-protection component of the Fifth Amendment’s Due Process Clause.”[3]

On August 21, the Supreme Court, in National Institutes of Health v. American Public Health Association, granted the government’s application for a stay of the district court’s order vacating NIH’s termination of various research grants. The Court denied the government’s application with respect to the district court’s vacatur of related internal guidance documents. The Court’s order impacts federal government grantees who wish to challenge grant terminations in federal court.

On July 29, 2025, Attorney General Pam Bondi issued new guidance to all federal agencies entitled “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination” (“Guidance”). The Guidance purports to “clarif[y] the application of federal antidiscrimination laws to programs or initiatives that may involve discriminatory practices, including those labeled as Diversity, Equity, and Inclusion (‘DEI’) programs.” It declares that “[e]ntities receiving federal funds . . . must ensure that their programs and activities comply with federal law and do not discriminate on the basis of race, color, national origin, sex, religion, or other protected characteristics,” and identifies a series of “‘Best Practices’ as non-binding suggestions to help entities comply with federal antidiscrimination laws and avoid legal pitfalls.” The Guidance is the most comprehensive articulation of the Administration’s view of what constitutes unlawful DEI released since President Trump’s Executive Order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, issued on January 21, 2025.