The Hidden Bias in Education Funding: How Eliminating DEI Worsens Racial Disparities

The U.S. Department of Education (ED) administers numerous funding programs aimed at improving access to education, yet many of these programs have been shown to disproportionately favor white students. With the recent push to eliminate Diversity, Equity, and Inclusion (DEI) funding, racial disparities in education are poised to deepen further. Structural inequities in merit-based scholarships, federal student loan programs, state-level financial aid, and institutional funding all contribute to racial disparities in educational opportunities ongoing disadvantages for marginalized communities. While these programs may be designed as race-neutral, their implementation often reinforces systemic advantages for white students.

Merit-Based Scholarships and Grants

Many funding programs award aid based on academic performance, standardized test scores, and extracurricular achievements—criteria that tend to favor white students due to longstanding racial inequities in education.

• National Merit Scholarship Program: This program relies on PSAT scores to determine eligibility. However, research shows that racial disparities in standardized testing often place Black and Latino students at a disadvantage, resulting in disproportionately fewer students of color receiving National Merit Scholarships.
• State Merit-Based Aid Programs: Scholarships such as Georgia’s HOPE Scholarship and Florida’s Bright Futures Scholarship prioritize students with high SAT/ACT scores and GPAs. Since these scores correlate with family income and access to quality education—both of which favor white students—Black and Latino students receive fewer of these awards.
• Institutional Merit Aid: Many predominantly white institutions (PWIs) distribute merit-based scholarships based on legacy admissions, extracurricular involvement, and internships—opportunities more accessible to students from wealthier, often white backgrounds.

Federal Student Loan Forgiveness and Income-Based Repayment

Federal financial aid is intended to provide opportunities for all students, but the structure of some repayment and forgiveness programs skews in favor of white borrowers.

• Public Service Loan Forgiveness (PSLF): This program benefits individuals working in government or nonprofit jobs, which disproportionately favor white professionals due to hiring biases and historical advantages in job accessibility.
• Income-Driven Repayment (IDR) Programs: White borrowers tend to enroll in graduate programs at higher rates than Black and Latino students, leading them to accumulate more student loan debt. However, since IDR programs extend repayment terms and offer forgiveness after 20-25 years, they often benefit those with high debt loads from graduate education—typically white borrowers.
• Student Loan Default Disparities: Data from the Department of Education shows that Black students, even when eligible for federal aid, are more likely to default on their student loans due to economic disparities. White borrowers, with greater access to generational wealth, are more likely to successfully navigate repayment plans.

Legacy and Alumni-Based Institutional Aid

Institutional funding plays a crucial role in how financial aid is distributed, and white students often benefit disproportionately from legacy admissions and alumni-funded scholarships.

• Legacy Admissions: Many elite universities allocate financial aid to students with family ties to alumni. Since white students historically had greater access to higher education, they are more likely to benefit from these institutional scholarships.
• Endowed Scholarships: Privately funded scholarships at PWIs often reflect donor priorities, which historically align with majority-white student populations. Meanwhile, Historically Black Colleges and Universities (HBCUs) receive less federal and private funding, limiting the financial aid they can provide.
• Disparities in Endowments: PWIs generally have significantly larger endowments than HBCUs, allowing them to offer more substantial financial aid packages. Harvard University’s endowment, for example, exceeds $50 billion, while the largest HBCU endowment (Howard University) is under $1 billion.

FAFSA and Family Wealth Disparities

The Free Application for Federal Student Aid (FAFSA) is the gateway for students to receive need-based aid, but the way federal aid is calculated disadvantages Black and Latino students.

• Expected Family Contribution (EFC): FAFSA considers income but does not factor in disparities in generational wealth. Since white families typically have higher household wealth due to historical economic advantages, white students are more likely to qualify for financial support from their families while still receiving federal aid.
• Work-Study Opportunities: Federal work-study programs provide part-time employment to students with financial need, but many work-study jobs are concentrated at PWIs, where white students make up the majority.

Federal and State Research Grants

• STEM Research Grants: The National Science Foundation (NSF) and National Institutes of Health (NIH) fund a significant amount of graduate research in science, technology, engineering, and mathematics (STEM). However, due to underrepresentation of Black and Latino students in STEM fields—stemming from systemic barriers in early education—these grants disproportionately benefit white students.
• State-Level Research Funding: Public universities receive funding for research initiatives, but Black-majority institutions often receive fewer research grants, reducing opportunities for students of color to access high-quality research experiences and financial support.

Conclusion: Addressing Racial Disparities in Education Funding The Impact of DEI Funding Cuts

While the Department of Education’s funding programs are designed to support students regardless of race, systemic inequalities in K-12 education, wealth distribution, and access to academic resources result in a landscape where white students disproportionately benefit. Addressing these disparities requires:

The recent movement to eliminate DEI initiatives in education funding threatens to exacerbate existing disparities. Dear Colleague Letters from the U.S. Department of Education have historically been used to guide equitable funding policies and address racial disparities in education. If DEI funding is removed:

• Programs that provide scholarships to underrepresented students may be eliminated.
• HBCUs and Minority-Serving Institutions (MSIs) may see further reductions in federal support.
• Efforts to close racial wealth gaps in student aid would be undermined.

Conclusion: Protecting DEI to Ensure Fair Educational Access

While the Department of Education’s funding programs are designed to support students regardless of race, systemic inequalities in K-12 education, wealth distribution, and access to academic resources result in a landscape where white students disproportionately benefit. Removing DEI funding would further cement these disparities. Addressing these issues requires:

• Reforming Standardized Testing Requirements: Reducing reliance on SAT/ACT scores in merit-based aid programs to create more equitable access.
• Expanding Funding for HBCUs and Minority-Serving Institutions (MSIs): Increasing federal and private investment in institutions that primarily serve students of color.
• Reevaluating Legacy and Merit-Based Scholarships: Shifting financial aid priorities to focus more on need-based aid rather than historical advantages.
• Increasing Federal Support for Student Loan Borrowers of Color: Strengthening programs that specifically assist Black and Latino students in loan repayment and debt forgiveness.

Only through targeted reforms can the education system move toward greater racial equity and ensure that federal funding supports all students fairly, regardless of race. Without DEI initiatives, the racial disparities in education funding will only grow wider. Policymakers and educational institutions must recognize the importance of equity-focused funding to ensure fair access to higher education for all students.

Dr. Derrick Campbell

CEO

moreinfo@quarantineracism.com