Report: Minority-Serving Institutions Can Expand Their Impact — With Strong Funding
Credit: FatCamera / Getty Images- An American Council on Education report outlines how historically Black colleges and universities (HBCUs), tribal colleges and universities (TCUs), and minority-serving institutions (MSIs) increase economic mobility for their students, improve degree attainment, and enhance transfer opportunities.
- But not all HBCUs, TCUs, and MSIs receive the same level of funding.
- The report’s authors suggest increasing funding to these schools to improve workforce outcomes, boost student success, and create economic opportunities.
A new report from the American Council on Education (ACE) outlines how historically Black colleges and universities (HBCUs), tribal colleges and universities (TCUs), and minority-serving institutions (MSIs) play a critical role in advancing economic mobility for students of color and historically excluded student populations.
The analysis reveals how essential increased investment in these institutions is to expand their impact.
The report shows that the level of federal funding plays a significant role in the outcomes of these schools. As compared to less-funded MSIs, MSIs that receive strong federal funding provide students with:
- Increased economic mobility for graduates
- Increased degree attainment
- Higher graduation rates for low-income students
- Better transfer opportunities
The report reads: “our findings revealed that funded MSIs provided greater outcomes when compared with eligible MSIs, and they both provided greater outcomes than those of institutions that were not HBCUs, TCUs, or MSIs.”
Congress appropriates funding to HBCUs, TCUs, and MSIs as outlined by the Higher Education Act. However, reporting investigations have found that these institutions are historically underfunded and have smaller endowments than principally white institutions.
“Despite facing significant resource constraints, these institutions consistently deliver strong outcomes, equipping students with the tools they need to thrive academically and professionally,” ACE President Ted Mitchell said in a press release about the report.
The report outlines how students who attend HBCUs, TCUs, and MSIs experience significant economic benefits after graduating. And graduates of well-funded MSIs have higher median earnings than peers at similar institutions.
Additionally, Pell Grant recipients at well-funded MSIs have higher graduation rates than those at similar but unfunded institutions. These schools award more degrees and certificates to their target populations than alternative institutions.
The analysis found that TCUs on average enroll almost nine times as many American Indian or Native American transfer students than schools that aren’t HBCUs, TCUs, and MSIs. Data from the National Student Clearinghouse Research Center shows that the number of transfers grew 4.4% between fall 2023 and fall 2024.
Importance of Federal Funding to MSIs
The authors of the report found that not all HBCUs, TCUs, and MSIs are the same.
Some are better funded than others — receiving more in federal and state funding — and this makes a difference in student outcomes. MSIs that receive strong federal funding provide greater student outcomes than MSIs that are not well funded.
“As this report makes clear, investment in HBCUs, TCUs, and MSIs is an investment in the nation’s future,” Hironao Okahana, vice president and executive director of ACE’s Education Futures Lab and one of the report’s authors, said in the press release.
“By ensuring that these institutions receive the funding they need, we can sustain and expand their transformative impact on student success,” Okahana said.
Researchers analyzed and compared degree completion rates, labor market earnings, transfer rates, and undergraduate outcomes from both MSIs and non-MSIs.
The authors of the report say their analysis underscores the importance and need for increased investment in these institutions from federal and philanthropic entities. The authors argue that while these schools have historically operated with fewer resources than predominantly white institutions, they have high contributions to equity and economic mobility.
“Expanding funding to eligible MSIs is crucial for enabling them to provide the necessary services to drive student persistence and degree completion,” the report reads. “Although the full impact of funding on student success takes time to materialize, the analysis clearly shows that both funded and eligible MSIs are achieving superior outcomes, reinforcing the need for greater and sustained investment.”
The authors suggest that expanding financial support to HBCUs, TCUs, and MSIs can improve workforce outcomes, boost student success, and create economic opportunities.
On his first day in office, President Donald Trump signed an executive order to end educational equity initiatives and has continued to cut funding to educational diversity programs since then.
Student outcomes are important to Americans. While they believe higher education costs too much — despite not paying full tuition sticker prices — they concur that it is worth it.
Historically excluded students experience basic needs insecurity at higher rates than white students. Additionally, colleges and universities across the country are facing federal funding cuts, including some TCUs.