New Administration Outlook: How Educational Institutions Can Navigate the Attack on DEI

As the entire public and private sector adjust to the Trump Administration's attack on programs focused on diversity, equity, and inclusion ("DEI"), colleges and universities are in a difficult position. Like federal contractors and grantees, educational institutions that rely on federal funding find themselves at the mercy of an administration that is quick to revoke such funding based on little more than a suspicion of unlawful conduct. Below, we summarize what we have seen from the administration thus far and provide guidance on how colleges and universities might consider adjusting their practices to mitigate risk.

Administration Action on DEI

The Trump administration took early and significant action against DEI, issuing several Executive Orders on the subject in the first few days of Trump's second term. These orders are discussed in this earlier post. Relevant to educational institutions, the orders forbid "illegal DEI" and state that entities that engage in such practices will lose federal funding and/or face investigation. Although the orders do not define "illegal DEI," subsequent administrative actions provide guidance on how the administration will interpret existing law as it applies to DEI programs.

Dear Colleague Letter

On February 14, 2025, the Acting Assistant Secretary for the Department of Education released a Dear Colleague letter on this issue. The letter describes what it calls "the nondiscrimination obligations of schools and other entities that receive federal financial assistance" under the new administration. It largely focuses on interpreting the 2023 Supreme Court decision in Students for Fair Admissions v. President & Fellows of Harvard College (SFFA), which it states "applies more broadly" than just to admissions decisions.

The Department defines "unlawful DEI" to be when "an educational institution treats a person of one race differently than it treats another person because of that person's race[.]" Accordingly, the letter states that educational institutions are prohibited from using race in decisions pertaining to "admissions, hiring, promotion, compensation, financial aid, scholarships, prizes, administrative support, discipline, housing, graduation ceremonies, and all aspects of student, academic, and campus life." The letter further provides several examples of actions that "may appear neutral on their face" but would violate the Department's view of the law, including:

• Using a student's personal essays, writing samples, participation in extracurriculars, or other cues as a means of determining or predicting a student's race and favoring or disfavoring such students;
• Relying on non-racial information as a proxy for race, and making decisions based on that information, such as an educational institution eliminating standardized testing to achieve a desired racial balance or to increase racial diversity; and
• DEI programs, which the letter states are discriminatory in a "less direct, but equally insidious" way.

Two weeks after releasing the Dear Colleague letter, the Department released a second document titled, "Frequently Asked Questions About Racial Preferences and Stereotypes Under Title VI of the Civil Rights Act" ("FAQs"). The FAQs further discuss educational actions that the Department deems to violate federal law, including:

• School-sponsored or school-endorsed "racially segregated aspects of student life" such as programming, graduation ceremonies, and housing;
• Discriminatory policies and practices "under the banner of 'DEI' initiatives," including those that label themselves as "'social-emotional learning or culturally responsive teaching;'" and
• Discriminatory selection of third-party contractors, including when choosing providers of after-school programs, substitute teachers, cafeteria services, and special education service providers.

However, the FAQs also identify some areas of race-based educational programs that may be permitted under OCR's interpretation, including:

• Programs focused on interests in particular cultures, heritages, and areas of the world, assuming they are open to all students regardless of race;
• Educational, cultural, or historical observances such as Black History Month, International Holocaust Remembrance Day, or other similar events "so long as they do not engage in racial exclusion or discrimination";
• Any rights otherwise protected by the First Amendment; and
• Admissions considerations of an applicant's discussion of how race affected the applicant's life, "so long as that discussion is concretely tied to a quality of character or unique ability that the particular applicant can contribute to the university," noting, "schools that craft essay prompts in a way that require applicants to disclose their race" would violate the law.

The Department has warned that institutions that fail to comply with its interpretation of the law risk losing federal funding, and it has promised to "vigorously enforce" the terms of the letter as to all preschool, elementary, secondary, and postsecondary educational institutions as well as state educational institutions that receive federal funding.

Recent Investigations Into Institutions of Higher Education

Less than a month after releasing the Dear Colleague letter, the Department opened investigations into 45 universities under Title VI. The Department alleges that these universities violated Title VI by partnering with "The PhD Project," an organization that provides doctoral students with information, resources, and networking opportunities geared toward enhancing students' ability to obtain a Ph.D. The Department stated that PhD Project's eligibility requirements based on race violate Title VI. The Department also opened investigations into six universities' race-based scholarship programs and alleges that one university engages in a program that segregates students based on race. In addition to these open investigations, the Trump Administration has also already frozen funding to entities it believes violate its policies, including policies against "antisemitism" and inclusion of transgender athletes.

Practical Steps That Educational Institutions Can Take To Limit Risk

The Department's letter and FAQs do not change the governing law, which is Title VI of the Civil Rights Act. Indeed, since the Supreme Court overturned the Chevron rule in 2024, courts are no longer required to defer to agency guidance in interpreting statutes, and so the Department's interpretation likely carries little weight. See our Loper Bright Enterprises v. Raimondo alert: "How Might Agencies and Courts React After Supreme Court Upends 40 Years of Chevron Deference?" This is especially true with regard to places where the interpretations depart from existing precedent or conflict with existing law. See, for example, our previous advisory: "Trump's DOE Letters and Colleges' First Amendment Defenses Against Pretextual Title VI Threats."

Nevertheless, the risk remains that an educational organization may see its funding impacted based on a suspicion that it has violated the law, and it may suffer the consequences of a funding freeze before it is afforded the ability to demonstrate that its conduct is lawful. For that reason, it is important for organizations to take steps to be ready for potential investigation:

1. Take stock of all DEI and race-conscious programs. Many leaders may not have a full view of the programs underway at a given institution. Now is this time to ensure leadership and the legal department are apprised of this work and understand why it is being done.
   
   
2. Assess the risk associated with programs with demographic exclusions. After creating an inventory of all work that could fall under the scope of the Dear Colleagues letter, review each program and assess whether it could be construed as violating Title VI, either under a traditional analysis or as applied by the Department of Education. Consult with an attorney for this review and ensure all documents related to it are treated as privileged and confidential. Limit non-privileged discussions of this work.
   
   
3. Determine your organizational risk tolerance. There is no one correct way to handle the threats that educational organizations are facing. Because of the uncertainties that abound, it is critical for institutional leaders to align on how DEI programs, race-conscious programs, gender identity inclusion, and other issues under scrutiny by the Department of Education and the Trump administration align with the organization's values. Typically the more these programs are central to an organization's values and mission, the more risk the entity may be willing to take on in order to maintain programs. This is a difficult conversation and one that should be done early so that organizations are in a position to respond, rather than react, when developments arise.
   
   
4. Be mindful of risk on both sides. In assessing organizational risk tolerance, it is important to address the risks coming from the administration, but just as important to identify risks associated with changing course. Most DEI and related programs exist in order to prevent traditional forms of discrimination. If a program is successful, and you do not believe it violates established law, you may incur more risk by ending it than you would in maintaining it. Moreover, organizations should be mindful of their many stakeholders and how these groups may react to policy changes. For example, students, prospective students, parents, employees, donors, community partners, grantmaking organizations, alumni organizations, and others will all have a perspective on how educational organizations should respond in this moment, and any decision-making in this area should take into account any potential repercussions from those groups.
   
   
5. Mitigate risk around DEI and related work. Program adjustments should be done carefully and on a case-by-case basis. At a high level, however, organizations should scrutinize programs or benefits with racial or other demographic exclusions. Where any programs do name race or in some way take demographics into account, organizations should ensure that they can articulate legitimate, nondiscriminatory reasons for those programs.
   
   
6. Finally, entities that have received any form of notice that they are under investigation should be aware of their duty to preserve documents, including electronic documents.

This is a complicated time for educational organization that value diversity, equity, and inclusion, and it is particularly fraught for those who rely on federal funds. Educational organizations need not accept the Department's guidance letter as binding law; however, they should move forward thoughtfully and make adjustments as needed to mitigate unnecessary risk. Our multidisciplinary education and DEI counseling teams can help.