Education Department Reallocates MSI Funds Again

The U.S. Department of Education is reallocating funds for minority-serving institutions to the Strengthening Institutions Program, a capacity-building grant for low-resourced colleges that enroll large numbers of low-income students. The fiscal year 2026 competition will support efforts tied to workforce readiness, responsible use of artificial intelligence, and development of short-term programs. The shift comes after an eligibility application for low-resourced institutions that named only SIP and did not mention Hispanic-serving institutions, predominantly Black institutions, or other MSI programs. The department has described MSIs as unlawful and unconstitutional in connection with SIP’s one-time expansion. The administration has previously redirected discretionary funds away from MSIs, including directing money to historically Black colleges and universities and tribal colleges. The program is intended to prepare students for real-world, in-demand, high-wage careers.

"The U.S. Department of Education announced Thursday that it's reallocating funds for minority-serving institutions to the Strengthening Institutions Program, a capacity-building grant for low-resourced colleges that serve high numbers of low-income students. The grant competition will support colleges' efforts related to "workforce readiness," "responsible use of artificial intelligence" and the development of short-term programs."

"The investment in the Strengthening Institutions Program for fiscal year 2026-at the expense of MSIs-comes as no surprise to MSI advocates, who have been predicting the move for months. In March, the Education Department came out with an eligibility application for grant programs serving low-resourced institutions that only named SIP and made no mention of Hispanic-serving institutions, predominantly Black institutions or other MSI programs."

"The department called MSIs "unlawful" and "unconstitutional" in its recent press release about SIP's one-time expansion. The Trump administration has long taken issue with MSIs' enrollment thresholds for particular racial or ethnic groups, whereas SIP has no race-related criteria."

""The Strengthening Institutions Program and its accompanying grant awards will equip eligible colleges and universities with the resources they need to prepare students for real-world, in-demand, high-wage careers," U.S. Department of Labor assistant secretary for employment and training Henry Mack said in the release."

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