A new legal battle over the role of race and ethnicity in federal funding for higher education has erupted, as the State of Tennessee and Students for Fair Admissions, Inc. (SFFA) filed a lawsuit today against the United States Department of Education and its Secretary, Linda McMahon.
The lawsuit, lodged in the U.S. District Court for the Eastern District of Tennessee (Case No. 3:25-cv-270), challenges the constitutionality of the Department’s Hispanic-Serving Institution (HSI) program, alleging it discriminates based on ethnicity.
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The core of the complaint centers on the HSI program’s eligibility criteria, which mandate that institutions of higher education must have an undergraduate enrollment of at least 25% Hispanic students to qualify for substantial federal grants. These grants, totaling millions of dollars annually, support various programs from new lab equipment to STEM tutoring for low-income students.
Tennessee Attorney General Jonathan Skrmetti, a plaintiff in the case, asserted, “A federal grant system that openly discriminates against students based on ethnicity isn’t just wrong and un-American—it’s unconstitutional.”
He drew a direct parallel to the Supreme Court’s decision in SFFA v. Harvard, which struck down race-based admissions, arguing that the HSI program’s “discriminatory grant standards are just as illegal.” Skrmetti emphasized, “Treating people differently because of their skin color and ancestry drags our country backwards. The HSI program perversely deprives even needy Hispanic students of the benefits of this funding if they attend institutions that don’t meet the government’s arbitrary quota.”
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The complaint details how Tennessee’s public colleges and universities, despite serving Hispanic and low-income students, are ineligible for HSI grants because they do not meet the 25% Hispanic enrollment quota.
For instance, the University of Memphis, with 47% of its students receiving federal Pell Grants (indicating low-income status) and 62% being racial or ethnic minorities, cannot access HSI funds because it “lacks the ‘right’ ethnic make-up.” The lawsuit explicitly states that “not one of them qualifies to receive grants under the HSI program. Why? Because they don’t have the right mix of ethnicities on campus.”
SFFA, a co-plaintiff, describes itself as a “nonprofit membership group of tens of thousands of individuals across the country who believe that racial and ethnic preferences in higher education are unfair, unnecessary, and unconstitutional.” The organization highlights how its members, including professors and students at otherwise eligible institutions, are harmed by the lack of HSI funding due to the ethnic threshold. For example, a professor at one of the eight eligible Tennessee institutions cannot secure HSI grants for research facilities, impacting academic opportunities for students.
The lawsuit outlines the three sub-programs under the HSI umbrella—Developing Hispanic-Serving Institutions, Promoting Postbaccalaureate Opportunities for Hispanic Americans, and Hispanic-Serving Institutions – Science, Technology, Engineering, or Mathematics and Articulation—all of which, it claims, discriminate based on ethnicity.
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The plaintiffs argue that the HSI program exceeds Congress’s power under the Spending Clause, as it “does not pursue the general welfare” but rather “the welfare of one ethnic group at the expense of everyone else.” They assert that the program’s conditions conflict with the Fifth Amendment’s Due Process Clause and the Fourteenth Amendment’s Equal Protection and Citizenship Clauses, which prohibit ethnic discrimination by the federal government. The complaint further alleges that the HSI program fails strict scrutiny, lacking a compelling governmental interest and not being narrowly tailored.
As a result of these “unconstitutionally discriminatory criteria,” the lawsuit states that “otherwise qualified Tennessee institutions—including ones that serve Hispanic and needy students—can’t compete for tens of millions of dollars that are allocated to HSI programs.” In fiscal year 2022, the Department of Education awarded 78 HSI grants totaling $45,727,609.
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The State of Tennessee also contends that the HSI program places its institutions in an “unconstitutional dilemma”: either serve Hispanic students lawfully and forgo federal funding, or engage in affirmative action to meet the quota, thereby violating state and federal anti-discrimination laws. Tennessee recently enacted a law banning discrimination in higher education based on race, color, ethnicity, or national origin, including affirmative action.
The plaintiffs are seeking a declaratory judgment that the HSI program’s ethnicity-based requirements are unconstitutional and a permanent injunction preventing the Secretary of Education from enforcing these requirements in grant decisions for Tennessee institutions.
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