How Trump’s Anti-DEI Push Is Unraveling College Scholarships

Some programs are being discontinued, while others are being broadened to include more students

The Wall Street Journal

By Tali Arbel

July 5, 2025

Colleges, companies and philanthropic organizations are retooling millions of dollars in scholarships that for years supported minority students.

Under threat from the Trump administration and activist groups over diversity programs, some are scrapping scholarships entirely. Others are broadening the programs to focus on low-income students in general or tweaking applications to try to keep their original missions.

“We’re seeing widespread fear of litigation prompt many scholarship providers to re-evaluate,” said Jackie Bright, president of the National Scholarship Providers Association.

In June, $56 million in scholarships in the NSPA database had race, ethnicity or gender criteria, a decrease of 25% from March 2023. The database is a small but indicative slice of the billions of dollars of financial aid available in the U.S.

As part of President Trump’s crackdown on diversity, equity and inclusion programs, the Education Department told schools in February that using race in financial aid could threaten their federal funding. Some universities are under investigation for their scholarships.

Even before Trump took office, the 2023 Supreme Court ruling that found it unconstitutional to consider race in university admissions had forced changes to scholarships. Many interpreted the decision to mean that other race-conscious programs in higher education could be “legally suspect,” said Suzanne Eckes, a professor at the School of Education at the University of Wisconsin-Madison. State officials and legislatures also pushed to eliminate race from aid.

Education experts said the changes could make it harder for minority students to graduate from college. “There’s going to be a decline in college affordability and completion rates for those students,” Bright said.

Killing the scholarship

The University of Michigan’s alumni association in March told students it was canceling the Lead Scholars program, a week before the school announced it was closing its DEI offices. The alumni group said it ended the scholarship to comply with the law and with guidance from the federal government.

More than 800 students have received awards since Lead Scholars began in 2008. It was meant to support minority students after the state of Michigan banned using racial preferences in public-college admissions, and offered at least $5,000 a year as well as community events.

Ana Trujillo Garcia, a rising senior studying art and design, with a focus on furniture, said the financial benefits—$5,000 a year—have been important, but so was the environment Lead Scholars created. She made friends through the program and shared her art at a cultural showcase.

“ It was great to have a community of only minorities,” she said. “’Cause on campus, you see everyone. But in that one, you saw everyone that was like you.”

Other scholarships have dwindled or are on pause. The Justice Department in April said that the state of Illinois and six schools—including Northwestern University, Loyola University of Chicago and the University of Chicago—suspended a scholarship for minority graduate students called Diversifying Higher Education Faculty in Illinois after the department threatened a lawsuit over racial discrimination.

“This Department of Justice is committed to rooting DEI out of American institutions,” said Attorney General Pam Bondi.

The Illinois Board of Higher Education said the program wasn’t suspended, but the state had agreed to evaluate the fellowship—which is enshrined in state law—along with the Illinois General Assembly.

Northwestern withdrew from the program in March, a school spokesman said. Loyola and the University of Chicago didn’t respond to requests for comment. The University of Illinois-Chicago on its website said its participation in the program was paused because of “funding restrictions from sponsor.”

Changing the Scope

Earlier this year, McDonald’s removed a Hispanic-ancestry requirement from its 40-year-old Hacer college scholarship program, after a lawsuit from an activist group that challenges the use of race in scholarships. Instead, Hacer applicants must show their contribution to the Hispanic community through activities and leadership.

Scholarship recipients said the money was important to their success, but winning the prize also made them feel recognized as Latinos who had overcome barriers.

“It felt like you were seen because of your accomplishments, but also because you are part of a group that’s been marginalized for years,” said Erick Soto, a 2024 graduate from the University of Arkansas and 2020 Hacer recipient. His scholarship was for $20,000 over four years.

McDonald’s declined to comment beyond a January statement saying it disagreed with the claim that the scholarship was discriminatory but wanted to protect the program.

Edward Blum, whose group was behind the lawsuit that led to the 2023 Supreme Court decision that banned affirmative action, also brought the McDonald’s lawsuit.

“You can’t remedy past discrimination with new discrimination,” he said. “Treating people differently because of their race or ethnicity is legally wrong.”

The Gates Foundation in April removed race and ethnicity from the Gates Scholarship, saying anyone eligible for a federal Pell Grant could apply. The foundation said on its website that it began evaluating in September how to reach the broadest range of low-income students and that it takes “its compliance obligations seriously.” It didn’t return requests for comment.

Blum, the activist, said he had filed a complaint in April with the Internal Revenue Service, asking it to investigate the Gates Foundation’s tax-exempt status because of discrimination against white students.

In March, Hawkeye Community College in Waterloo, Iowa, sent LaTanya Graves a letter saying the $250-a-semester scholarship her family set up for Black students in 2020 likely had to change because of the government’s position on “nondiscrimination obligations” for schools that get federal funding. Hawkeye said out of more than 460 scholarships its foundation awarded each year, 10 had race as criteria.

Graves, who had created the scholarship in honor of her mother, bristled at the letter. But she said she blamed the government, not the school.

“How can the government dictate what a family sets up?” she said.

Write to Tali Arbel at tali.arbel@wsj.com

Appeared in the July 7, 2025, print edition as 'Trump’s Anti-DEI Push Unravels College Scholarships'.

How Trump’s Anti-DEI Push Is Unraveling College Scholarships - WSJ

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