The basic programmatic structure for the federal institutional aid programs that are so important to community colleges is unclear at this moment. The good news is that financial support seems stable as FY 2026 funding legislation is finalized and FY 2027 funding comes under consideration.
FY 2026
In late January, FY 26 Labor, HHS and Education (LHHS-ED) appropriations legislation was agreed to by leaders from both parties in both chambers of Congress. The bill level-funded most programs of interest to community colleges and was therefore a largely positive outcome, given political realities. This bill was enacted on February 3, 2026.
For most higher education programs, the FY 2026 Labor-HHS-ED bill directs the administration to spend a certain amount on each specific program, as indicated in the “joint explanatory statement” that accompanies the bill. This is Congress’s way of ensuring that funds are spent as intended, in contrast to the treatment of some programs under the FY 2025 year-long continuing resolution.
The joint explanatory statement to the FY 2026 legislation also includes specific amounts for each of the Title III-A and Title V programs – Strengthening Institutions (SIP), Developing Hispanic-Serving Institutions, Promoting Postbaccalaureate Opportunities for Hispanic Americans, Strengthening Predominantly Black Institutions, Strengthening Asian American and Native American Pacific Islander-Serving Institutions, Strengthening Alaska Native and Native Hawaiian-Serving Institutions, Strengthening Native American-Serving Nontribal Institutions and Tribal Colleges and Universities - most of which (except for SIP) are small increases over current funding levels. However, except for SIP and the Tribal Colleges and Universities Program, the administration has deemed these programs unconstitutional because eligibility for them is based in part on enrolling a certain percentage of students from a particular racial or ethnic group.
As a result, the bill language that applies to Minority Serving Institution (MSI) programs is different, in a critical fashion, than that for other programs. Rather than a directive that the administration spend the amounts listed in the statement for each of these programs, the bill only specifies one amount - $493.3 million – that is to be spent on all the Title III-A and Title V programs. Within that amount, the bill specifies that $53.8 million be spent on the Tribal Colleges and Universities program. This leaves $439 million for the other institutional aid programs.
Even though it signaled an intent that the MSI programs should be funded by listing amounts for each of them in the explanatory statement, the bill tacitly recognizes that the Trump Administration is highly unlikely to fund programs that it has deemed unconstitutional. However, the bill is structured to prevent the administration from diverting unspent MSI funds into the HBCU and Tribal College and Universities programs, as it did last year. Instead, Congress seems to intend that the Title III-A and V funds, minus the amount specified for Tribal Colleges and Universities, should be granted to eligible institutions through a “super-sized Strengthening Institutions Program.” Other than Tribal Colleges and Universities, SIP is the only Title III-A program that the administration did not deem unconstitutional, because eligibility for the program is not based on minority enrollments.
At this time, it appears that the Administration is leaning towards holding a broad-based competition for institutional aid programs as outlined above, though nothing is definite. A competition that retained current funding levels for key institutional aid programs on a slightly different basis could, depending on the nature of the competition and the ability of community colleges to prepare applications, provide the same level of funding to community colleges as previously, or even more. Institutional aid is predicated on institutional need, measured by the resources of both student and college coffers, and here community colleges loom large. AACC and ACCT will do everything possible to ensure that, even in the absence of MSI programs receiving funding as in previous years, that federal institutional support for these and other colleges is sustained.
FY 2027
Given the contingent nature of the debate around institutional aid, it is imperative that community college advocates speak up forcefully for these federal programs. Again, maintaining the overall level of support is the top priority because, put simply, community colleges need the resources. Support that is consistent with federal goals is a reasonable expectation for the federal government, and helping Congress and the Administration set those goals is an extremely important activity. Community colleges have no reason to be shy about the benefits to their students that have been provided from all institutional aid programs, including MSI programs. The dispute over their legality is entirely separable from the advances they have led to. Obviously, it is important to be sensitive to the audience.
Federal institutional aid is designed to support the basic goals of the Title IV programs – ensuring access and success for all postsecondary students. If current institutional aid is preserved, these programs can continue to serve this indispensable role. Even though the explicit program design may be forced to change given the current political environment, the impact of the program may not be diminished – it might even be enhanced. All community college advocates are advised to ensure that legislators and agency personnel appreciate the positive impact on student success that institutional aid has had, and act accordingly.
Talking Points:
- If MSI funding is not present, it is important that federal institutional support remains available for colleges.
- Institutional aid must be preserved because it is instrumental for access and success for community college students.