Hispanic-Serving Institutions Need $1 Billion More in Federal Funding

Students participate in a graduation ceremony in Pasadena, California, June 14, 2019.

Authors’ note: The term “Hispanic” is used only in reference to Hispanic-serving institutions (HSIs) because it is an official federal designation. In all other instances, the authors use “Latinx,” a gender-inclusive term that more explicitly acknowledges Latin American ancestry. The data referenced in this analysis do not differentiate between Hispanic and Latinx students.

Latinx college enrollment is surging, but the colleges that serve large numbers of this population don’t have the resources to support these students properly. In fact, while Latinx students are entering college at rates that outpace their growth in the general population—and the enrollment rates of any other racial group—only roughly a quarter of those who start college earn a bachelor’s degree. To improve racial equity and give a rising generation the opportunity to succeed in college and the economy, Congress should invest a total of $1 billion in Hispanic-serving institutions (HSIs), which collectively enroll 2.5 million Latinx students.

Congress has funded a grant program for HSIs—among other minority-serving institutions (MSIs)—for nearly 30 years to help colleges build their institutional capacity to better serve Latinx students. This is important because many Latinx students are low income, work while in school to fulfill financial obligations, and are the first in their families to go to college. Moreover, they tend to enroll at underfunded public colleges; and lower funding directly translates to worse outcomes.

What was low HSI funding 30 years ago has become more and more inadequate given the recent explosion in the population of students who must be supported. In 2019, the total funding available for HSIs represented just $87 per Latinx student enrolled, compared with $1,642 per Black student enrolled at historically Black colleges and universities (HBCUs).

To get a sense of the proper size of the HSI program, the Center for American Progress calculated what it would take to raise the level of funding per Latinx student to half the size of what the HBCU program provides per Black student.

Some differences in funding among different types of MSIs are appropriate. First, HBCUs and tribal colleges and universities (TCUs) have a legacy of serving Black and Native American students as a direct response to racial discrimination, and that role must be recognized and preserved. Yet this is not the case for most HSIs. Second, an institution can attain the status of an HSI based on enrollment and without demonstrating a commitment to serving Latinx students. Finally, HBCU funding is based on a formula, meaning all eligible colleges receive funds, while HSIs only get funding if they are chosen in a competition. This means that while eligible losing colleges don’t get any funding, winning colleges receive more than the overall figure of $87 per targeted student would suggest.

What is a Hispanic-serving institution?

A Hispanic-serving institution (HSI) is a federal designation authorized by the Higher Education Act. Eligible colleges must be degree-granting, accredited, public or private nonprofit institutions that enroll at least 25 percent full-time equivalent Latinx undergraduate students. Slightly more than 40 percent of HSIs are public community colleges, 28 percent are public four-year colleges, and 30 percent are private nonprofit institutions.* Colleges can be designated as multiple types of minority serving institutions. For example, 75 HSIs are also Asian American and Native American Pacific Islander-serving institutions (AANAPISIs).

HSIs can seek funds that are exclusive to them through three competitive U.S. Department of Education award programs. The largest of these programs is the Developing Hispanic-Serving Institutions Program, which received $124 million in fiscal year 2019 funding, followed by the HSI Science Technology, Engineering, or Mathematics (STEM) and Articulation Program and the Promoting Postbaccalaureate Opportunities for Hispanic Americans Program—funded at $93 million and $11 million, respectively. Each requires half of the Latinx and entire student body to be low income and for the institution to have low per-pupil expenditures. In most cases, colleges can simultaneously receive grants from at least two of the programs. However, an HSI that receives an HSI grant has some limitations with regard to simultaneously receiving awards available to all minority-serving institutions, such as the Strengthening Institutions Program.

The only program with guaranteed funding is the HSI STEM program. This means that the budget for the other two programs—including the largest of the three—is entirely dependent on what Congress chooses to appropriate each year.

HSI funding is too scarce and competitive

Minority-serving institutions collectively face the structural injustice of insufficient funding. Funding levels for MSIs serving Black, Latinx, Native American, Asian, and Pacific Islanders have consistently fallen short of what is needed to effectively serve these groups.

The total pot of HSI funding looks deceptively high overall relative to other minority-serving institutions. (see Table 1) However, on a per-targeted-student basis—for example, Black students for HBCUs and Native students for TCUs—it is the second lowest, at $87. Meanwhile, AANAPISIs receive the lowest funding per student,** while predominantly Black institutions fare little better than HSIs, receiving a still insufficient $115 per targeted student.

Table 1

The acute competition for scarce funding among HSIs can be seen starkly at the programmatic level. A clear example of this is the Developing Hispanic-Serving Institutions Program, which is designed to bolster colleges’ overall capacity to serve students. In 2019, the Department of Education received 223 grant applications for new awards and only 43 were funded.

If Congress were to fund all HSIs at half the amount of funding per targeted student at HBCUs, it would require $821 for each of the 2.5 million Latinx students for a total cost of $2 billion. However, since the HSI program is competitive, meaning not every institution applies or receives funding, a meaningful initial step would be to provide enough funding so that half of the HSIs could receive amounts equal to 50 percent of the amount of funding per targeted student at HBCUs for half of their Latinx enrollment, totaling $1 billion.*** This recognizes that only about half of HSIs—about 215 institutions—might ultimately receive funds from the program.

Along with increased funding for HSIs, another solution could be to implement higher standards to ensure that HSIs intentionally serve Latinx students, rather than simply get credit for a student body to which they may not be particularly attentive. For example, Excelencia in Education has developed a framework to identify a comprehensive institutional strategy to serve Latinx students based on three core components: data, practice, and leadership. They are looking at institutions that track important data such as enrollment and retention while also intentionally implementing evidence-based policies to improve Latinx student success outcomes on their campuses. Higher standards could start with more pragmatic options at the institutional level, such as disaggregation of retention and transfer data. Alternatively, grantees of HSI programs could be required to report how they improve Latinx college attainment on their campuses, with the help of new funding, through measures such as equity audits.


To be clear, any improvement to federal funding for HSIs should not be at the expense of other minority-serving institutions. Moreover, along with a major new investment in HSIs, Congress should substantially increase the overall pot of funding for MSIs. The good news is that Congress has recently acknowledged the importance of MSIs. The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March created a set-aside of more than $1 billion for MSIs. And in January, Congress earmarked $255 million in permanent funding for MSI STEM programs in the bipartisan Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act.

But dramatic new action on HSIs is particularly urgent now and would have far-reaching impacts. Experts predict that 6.2 million more Latinx students will need to earn a college degree over the next 10 years in order for the United States to regain top international standing in college completion, meet workforce needs, and see a strong recovery from the pandemic. This means that a major new investment would not only pay off for one of the fastest-growing populations in the United States; it would pay off for everyone.

Viviann Anguiano is an associate director for Postsecondary Education at the Center for American Progress. Marissa Navarro is a special assistant for Postsecondary Education at the Center.

The authors would like to acknowledge Excelencia in Education, UnidosUS, and the Hispanic Association of Colleges and Universities for their review of this column.

*Authors’ note: These figures are based on authors’ analysis of 2020 Eligibility Matrix data from the U.S. Department of Education.

**Authors’ note: One possible explanation for low targeted student funding at AANAPISIs is that some of them also qualify as minority-serving institutions under other programs. For example, some of the California State University campuses are both HSIs and AANAPISIs but cannot receive awards from both programs.

***Authors’ note: This figure is based on authors’ analysis of 2018-2019 12-month unduplicated enrollment data from the National Center for Education Statistics as well as 2020 Eligibility Matrix data from U.S. Department of Education.