Next COVID Stimulus Must Do Better By MSIs

The CARES Act funding allocation systemically underfunded MSIs and students of color.
Blog Post
Sept. 3, 2020

Congress hit a stalemate in negotiations over another round of COVID relief early August and left millions of Americans without the support they needed, including the nearly 5 million students who attend Minority Serving Institutions (MSIs).

MSIs are institutions that enroll at least 50% students of color and have the official MSI designation granted by the Department of Education. MSIs include Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), Hispanic Serving Institutions (HSIs), Asian American and Native American Pacific Islander-Serving Institutions (AANAPISIs), and Predominantly Black Institutions (PBIs), among others. MSIs provide a special, culturally relevant experience for the country's students of color.

Congress passed the CARES Act in March and sent about $14 billion to higher education. But while MSIs received funding through the CARES Act, how these dollars were allocated deprived MSIs of the amount of money they needed to support their students of color and fill in institutional funding gaps. And now, Fall semester has started without additional financial support for higher education while the pandemic rages on, exacerbating MSIs' need for additional resources. Now that MSIs and Congress have had the time to learn about what went right—and wrong—with CARES funding, Congress should take this lesson and do right by MSIs and the nearly 30 percent of undergraduates that attend them in the next stimulus bill.

It’s actually a simple fix. Congress should change how it allocates money to institutions of higher education to be more equitable to MSIs. The CARES Act first distributed a dollar amount based on an institution's number of full-time students instead of the total number of students enrolled (headcount).

So, two schools, say, the University of Maryland — Baltimore County and the Community College of Baltimore County--received different amounts of money because of how many full-time students were enrolled in the Spring. In this case, University of Maryland — Baltimore County and the Community College of Baltimore County received similar amounts under the CARES Act—about $9.3 million each. But the Community College of Baltimore County's total enrollment is actually higher than University of Maryland- Baltimore County by 5,000 students.

In this case, the Community College of Baltimore County received less per student because fewer students attend full-time. But the point of the bill was to provide relief dollars to help schools and students weather the emergency. A part-time student’s needs aren’t less than that of a full-time student, yet the formula discounted part-time students and the institutions that serve them. On the contrary, low-income students are actually more likely to attend part-time.

This formula put MSIs and many other institutions with high populations of non-traditional students, like community colleges, at a disadvantage. Many or most MSI students are enrolled part-time due to financial challenges, jobs, or family responsibilities, and may have chosen to attend an MSI because it is more financially accessible than other institutions. In fact, over half of all students attending MSIs are eligible for Pell Grants. This funding formula led to systemic underfunding of MSIs, yet provided money to many of the schools that don’t do their part in enrolling vulnerable populations that tend to enroll part-time.

Take HSI's in California and Texas, for example. It is estimated that public two-year HSIs in California would each receive, on average, an additional $1 million if the funding formula changed from full-time enrollment to headcount. And in Texas, two-year public HSIs missed out on an average of over $340,000 each because the formula favored full-time students. That is a lot of money that vital HSIs, and thousands of Latinx students, missed out on during a crisis because of an inequitably-constructed funding formula.

The next stimulus bill should base funding on the number of students a school serves, not how many enroll full-time. This will ensure that institutions, especially MSIs, receive a more equitable amount of funding that provides support for the types of students they enroll. These already historically under-resourced schools were essentially punished for enrolling some of the country's neediest students who are more vulnerable in the pandemic. MSIs welcome students who need extra support to complete their education and should be funded accordingly. And some MSIs, like TCUs for example, depend on federal investments for nearly 70% of their operating revenue, making appropriate allocation of funds essential.

Students need help regardless of whether they attend college part- or full-time. If Congress does not change funding to be based on headcount in the next stimulus, it will be choosing to ignore the reality that most of today's college students are not full-time and will continue to perpetuate inequitable funding for Minority Serving Institutions and students of color across the country.

At a time where equity and racial justice are at the forefront of the American discourse, Congress can make a simple change to the next stimulus package that will have positive consequences for MSIs and the students of color that attend them. MSIs put student success first, provide an experience that other institutions can't offer to students of color, and have historically done more with less. This warrants particular attention to MSIs as negotiations for the next stimulus bill restart in Congress this month. Taking this lesson learned will allow under-resourced MSIs to serve their low-income students of color better during the pandemic and bring U.S. higher education closer to closing racial equity gaps.