The Trump administration’s actions on higher education aren’t impacting HBCUs—yet

On April 23, President Donald Trump signed an executive order to “Promote Excellence and Innovation at Historically Black Colleges and Universities” (HBCUs). The executive order rescinds prior Biden administration orders on HBCUs and notably lacks references to diversity, equity, inclusion and accessibility, pursuant to another executive order that terminated “illegal DEI and ‘diversity, equity, inclusion, and accessibility’ (DEIA) mandates, policies, programs, preferences, and activities in the Federal Government.” 

Trump’s HBCU order also renewed the White House Initiative on Historically Black Colleges and Universities, moving it from the Department of Education (DOE) to the Executive Office of the President. It reconstituted the Board of Advisors on Historically Black Colleges and Universities, which is housed in DOE, to include representatives from philanthropy, education, business, finance, entrepreneurship, innovation, and private foundations, as well as current HBCU presidents. 

On the surface, the latest executive order seems to provide HBCU leaders with a reprieve amid a barrage of punitive actions the administration has taken against other postsecondary institutions, including numerous Title IX and Title VI investigations and withholding billions of dollars from universities over claims of antisemitism and civil rights violations. In contrast, during a televised town hall in April, Trump pledged not to cut HBCU budgets, stating they “shouldn’t be concerned at all.” The executive order explicitly encourages states to “provide the required State matching funds for 1890 Land-Grant Institutions,” and asks the Department of Agriculture and state governments to ensure that HBCUs receive the maximum funding to which they may be entitled. 

However, these endorsements and directives to help HBCUs are obscuring a more sobering reality: The Trump administration’s broader economic agenda threatens to drastically reduce the financial capacity of Black students to attend college. HBCUs enrollment is largely students from low- and middle-income Black families, many of whom are dependent on public funds and safety net support for food, health care, and other basic needs. With policies that directly impact the financial capacity of Black families to afford higher education, the One Big Beautiful Bill Act and Trump’s economic agenda risk reducing demand for HBCUs. 

The One Big Beautiful Bill Act will disproportionally harm Black students 

HBCUs were established during an era of legal segregation prior to 1964, with the primary mission of providing higher education opportunities for Black Americans. Today, 102 HBCUs across 19 states, the U.S. Virgin Islands, and the District of Columbia continue to serve as important centers for Black academic achievement and community leadership for nearly 300,000 enrollees, 77% of whom are non-Hispanic Black students. While only representing 4% of all colleges nationwide, HBCUs produce 40% of Black engineers, 80% of Black judges, and 40% of all Black members of Congress. They represent an economic engine that heavily contributes toward upward economic mobility for Black families.  

Yet despite the president’s words, HBCU leaders should not rely on Trump to support their institutions. While Trump’s signature legislation, the One Big Beautiful Bill Act, does not directly target the funding or institutional powers of HBCUs, it is creating economic conditions that will disproportionately harm HBCU students. Such conditions for low- and middle-class Black students will directly impact HBCUs’ capacity to deliver on their mission and ability to serve Black communities. 

Income and wealth are among the strongest predictors of educational attainment in the U.S., with children from high-income families having up to seven times higher chances to access learning opportunities compared to low-income families. These advantages are unevenly distributed across racial lines, as higher shares of Black Americans are concentrated in the lowest income quintile, and wealth disparities further compound educational inequities. Between 2019 and 2022, median Black household wealth did increase from $27,970 to $44,890, but other racial groups’ wealth grew faster, with median wealth reaching approximately $62,000 for Latino or Hispanic households, $285,000 for white households, and $536,000 for Asian American households. These disparities are reinforced by structural factors, including differential homeownership rates and housing devaluation in Black neighborhoods, which limit equity that could be applied to college expenses, perpetuating intergenerational gaps in educational access. 

The Congressional Budget Office estimates that the One Big Beautiful Bill Act will decrease resources for poorest residents by about $1,600 per year—mainly attributable to cuts in Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The wealthiest Americans will realize a gain of $12,000.  

Approximately 30% of Black Americans rely on Medicaid and 1 in 5 rely on SNAP, despite only 14% of the U.S. population identifying as Black or African American. Since the Act will negatively impact Black families more than others, many Black students may be forced to delay college attainment or take on additional jobs to pay for education, while some students may decide not to enroll at all. And given that Black students have higher levels of student debt that any other group, they will be discouraged from enrolling in HBCUs—the very institutions that were created to serve them and provide a ladder for upward economic mobility.  

HBCUs are insulated from some higher education policy changes, but will still feel economic impacts 

HBCUs enroll a disproportionately high share of first-generation and low-income students, yet function with fewer resources compared to primarily white institutions (PWIs). Across two- and four-year nonprofit institutions, 71% of HBCUs students are Pell Grant-eligible, compared to the national average of 36%. 

College endowments reflect the wealth of their students. The 10 largest HBCU endowments in 2020 totaled just $2 billion, compared to $200 billion total across the 10 largest PWI endowments. On the surface, this means that some of the higher education provisions of the One Big Beautiful Bill Act will impact wealthy PWIs more than HBCUs. The act raised the tax rate on endowments from 1.4% to up to 8% based on the endowment value per student, affecting the wealthiest private colleges.  

While these wealthy colleges use revenue from their endowments to cover tuition for low-income students, the tax hike isn’t likely to prohibit them from funding students at their current levels. As Mae C. Quinn, a law professor at Penn State, wrote in a 2019 paper, wealthy schools can avoid the tax bill by spending down their endowments to support low-income students: “If rich colleges simply utilize more of their massive savings to further social justice, impact poverty, and enhance public good—particularly in their own at-risk communities—they will not only avoid federal taxation but also begin to address critiques about their elitism and greed.” 

There are other higher education provisions in the One Big Beautiful Bill Act that are more likely to affect institutions with graduate programs and those with fewer Pell-eligible students, rather than HBCUs. For example, most HBCUs’ tuition falls below the act’s new cap on some student loans, and the act’s provision of using graduates’ earnings to hold colleges accountable is a framework that prior administrations have used to close predatory institutions. 

While the One Big Beautiful Bill Act’s higher-education-specific policies mostly avoid impacting HBCUs, its cuts to safety net systems will still affect the economics of these schools. In light of that, HBCUs need policies that provide revenue support for external projects and development that build wealth for the institutions themselves and the communities that host them. Because HBCU students face considerably higher levels of economic vulnerability, the burden on these institutions to fund education for those students is strikingly high and dependent on public and philanthropic support. Therefore, the colleges most well placed to educate first-generation students enroll few of them, while HBCUs serve more of them with limited resources. 

How the Trump administration can truly support HBCUs 

To actually help HBCUs and their students, the Trump administration can first ensure that these schools get the funding they are legislatively entitled to. The Department of Education and Department of Agriculture found that 16 of the country’s 19 historically Black land-grant universities had been underfunded by their states by a total of $13 billion, according to the federal analysis of per-student state spending data from 1987 to 2020, as reported by Inside Higher Ed. Trump’s executive order on HBCUs encourages states to provide matching funds and establish a framework to address access to federal dollars. However, more can be done to stop short-changing HBCUs.  

To support HBCUs, initiatives must bolster the wealth profiles of their students. Former President Joe Biden’s debt cancelation initiatives were not a solution to ever increasing tuition, but they did provide relief to those students. Higher education institutions are leveraging society’s demand for college degrees by benefiting from a student loan system that injects substantial funds into the market. As taxpayers, we have chosen to support what we consider the foundational level of education: public elementary and high schools. However, given the economic importance of a college education today, it should be regarded as equally essential. Just as we don’t require loans for primary education, college should not be contingent on borrowing either. 

There is a pressing need for a universal public pathway to four-year postsecondary education. Most state legislatures have managed to keep tuition costs relatively low at public institutions and, thanks to federal and state financial aid programs covering their costs, many two-year colleges are becoming nearly free. Nonetheless, without a comprehensive public option across all sectors, canceling student debt is merely postponing the underlying issues rather than resolving them. 

In addition to strengthening the wealth profiles of students, the Trump administration can bolster HBCUs as anchors of economic and community development by helping these colleges and universities acquire and develop property. The nation’s 102 HBCUs receive an average of about $2.5 million annually in donations, compared to $230 million among approximately the 100 PWIs with billion-dollar endowments. The 3,300 non-HBCUs with endowments below $1 billion average around $4 million in annual gifts.  

Due to these limited resources, HBCUs have fewer personnel dedicated to attracting capital, such as property asset managers who go beyond basic facility maintenance to identify new investment opportunities. This limits the wealth HBCUs can generate for themselves and their surrounding communities. About half of HBCUs are located in majority-Black places, where residential and commercial real estate devaluation often restricts economic and community development.  

HBCUs can’t fund vital projects through tuition alone. Consequently, HBCUs must invest in affordable housing, commercial real estate, and other development projects for the community at large to generate revenue. The benefits extend to the institutions and the communities that host them.   

Because HBCUs have lower endowments, they require grants or low-interest capital to help build up surrounding neighborhoods. The Trump administration can bolster or leverage the Community Development Financial Institutions (CDFI) Fund—which tailors “resources and innovative programs that invest federal dollars alongside private sector capital”—to support HBCU students and their surrounding communities. CDFIs are mission-driven financial institutions that take a market-based approach to supporting economically disadvantaged communities.  

HBCUs must continue their mission of Black economic and community development 

While policy can play a vital role in strengthening HBCUs as key drivers of economic and community development, these institutions also have the capacity to help themselves.  

Banks, CDFIs, mission-driven investors, and philanthropists need to take immediate action. For example, in 2024, the Student Freedom Initiative and Steinbridge Group committed a combined $100 million to support the construction of housing near HBCUs. Additionally, Reinvestment Fund, a prominent national CDFI, is actively exploring new capital strategies to foster HBCU growth. An increasing number of philanthropic organizations are recognizing the importance of investing in community development as a means to support and expand the impact of HBCUs. 

Despite rising tuition rates, the preponderance of research shows that college degrees pay off. Individuals without college degrees may enter the workforce earlier and have less debt, but degree holders tend to have higher incomes, more career options, and greater job security. Despite the paralyzing sticker shock (which has been shown to discourage students from enrolling in postsecondary institutions), Black students should be encouraged to attend college given the benefits—just as much as, if not more than, students from other racial groups. Federal, state, and institutional financial aid packages ostensibly open access to the range of institutions that are available.  

While the One Big Beautiful Bill Act does not directly threaten HBCU funding or institutional powers, its drastic budget cuts will directly alter the economic realities of the students HBCUs aim to serve. By lowering purchasing power and failing to address massive wealth and endowment gaps among colleges, these policies indirectly undermine HBCUs’ mission.  

HBCUs have historically been a powerful economic engine for Black mobility and community development, but without ample support, their ability to serve low-income, first-generation students will be at risk. As economic hardship rises, students may be forced to delay or opt out of college altogether. These shifts will only increase the educational attainment gaps for Black families already struggling with income and wealth inequality, as they face a choice between college and basic necessities.