On February 14, the U.S. Department of Education (ED) issued a new "Dear Colleague" letter to "clarify and reaffirm the nondiscrimination obligations of schools and other entities that receive federal financial assistance from [ED]." The letter, which was sent to the departments of education in all 50 states, offers one of the most robust summaries of the administration's legal position on diversity, equity, and inclusion (DEI) to date and, in turn, has important implications for institutions of higher education (IHEs) and any organization that receives federal funding.
According to ED, the letter "explains and reiterates" existing nondiscrimination requirements under federal law, including Title VI of the Civil Rights Act of 1964 (Title VI) and the Equal Protection Clause. Through this letter, ED indicates it is taking a more expansive interpretation of the U.S. Supreme Court's decision in Students for Fair Admissions v. Harvard (SFFA), which prohibited the use of race as a factor in higher education admissions decisions.
ED states that SFFA applies broadly to any decision concerning "student, academic, or campus life." Therefore, according to the letter, the consideration of race in "decisions pertaining to admissions, hiring, promotion, compensation, financial aid, scholarships, prizes, administrative support, discipline, housing, [and] graduation ceremonies" is illegal. Stated simply, "[i]f an educational institution treats a person of one race differently than it treats another person because of that person's race, the educational institution violates the law."
ED's position, as set forth in the letter, presents several key takeaways for IHEs. These include:
- Generalized goals of increasing diversity or finding racial balance are not compelling interests that would survive strict judicial scrutiny. ED states that "treating students differently on the basis of race to achieve nebulous goals such as diversity, racial balancing, social justice, or equity is illegal under controlling Supreme Court precedent."
- Facially neutral programs are likely to elicit heightened scrutiny going forward. For example, ED indicates that "a school may not use students' 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." Therefore, any decision based on non-racial information will face scrutiny if such data is being used as a proxy for race.
- ED is virtually guaranteed to scrutinize DEI programs, functions, or positions more generally. The letter states that DEI programs "frequently preference certain racial groups and teach students that certain racial groups bear unique moral burdens that others do not." This suggests that ED could regard any IHE's DEI program as presumptively unlawful.
While the letter itself does not carry the force of law, it is instructive as to how ED intends to proceed and invites immediate action for IHEs. Specifically, it directs IHEs and other educational institutions to ensure their policies comply with the interpretation set forth in the letter within fourteen days of its issuance (February 28, 2025).
This includes ceasing any efforts to "circumvent prohibitions on the use of race by relying on proxies or other indirect means to accomplish such ends" and "all reliance on third-party contractors, clearinghouses, or aggregators" that may facilitate the use of race in decision-making.
The letter makes clear that IHEs that fail to comply "face potential loss of federal funding." IHEs should take this admonition at face value.
The letter comes at a time of disruption and uncertainty for IHEs that have already been grappling with how to comply with President Trump's DEI directives. For example, several IHEs have opted to rename or reorganize their DEI functions. Others have canceled long-standing diversity initiatives and events. As we await additional guidance from ED, we advise IHEs to review their current programs, policies, materials, and communications related to DEI to better understand whether they will face scrutiny in the current regulatory environment.
While the letter applies primarily to educational institutions, the administration will probably impose similar conditions on other organizations that receive federal funding.
Venable is actively monitoring the evolving regulatory landscape concerning DEI and anti-discrimination. If you are an IHE or other organization with questions regarding any of the issues discussed above, contact the authors of this article or any other attorney in Venable's Labor and Employment Group.