[Federal Register Volume 59, Number 36 (Wednesday, February 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4010]


[[Page Unknown]]

[Federal Register: February 23, 1994]


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Part VIII





Department of Education





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Nondiscrimination in Federally Assisted Programs; Title VI of the Civil 
Rights Act of 1964; Notice
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DEPARTMENT OF EDUCATION

 
Nondiscrimination in Federally Assisted Programs; Title VI of the 
Civil Rights Act of 1964

AGENCY: Department of Education.

ACTION: Notice of final policy guidance.

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SUMMARY: The Secretary of Education issues final policy guidance on 
Title VI of the Civil Rights Act of 1964 and its implementing 
regulations. The final policy guidance discusses the applicability of 
the statute's and regulations' nondiscrimination requirement to student 
financial aid that is awarded, at least in part, on the basis of race 
or national origin.

EFFECTIVE DATE: This policy guidance takes effect on May 24, 1994, 
subject to the transition period described in this notice.

FOR FURTHER INFORMATION CONTACT: Jeanette Lim, U.S. Department of 
Education, 400 Maryland Avenue, SW., room 5036-I Switzer Building, 
Washington, DC 20202-1174. Telephone (202) 205-8635. Individuals who 
use a telecommunications device for the deaf (TDD) may call the TDD 
number at 1-800-358-8247.

SUPPLEMENTARY INFORMATION: On December 10, 1991, the Department 
published a notice of proposed policy guidance and request for public 
comment in the Federal Register (56 FR 64548). The purpose of the 
proposed guidance and of this final guidance is to help clarify how 
colleges can use financial aid to promote campus diversity and access 
of minority students to postsecondary education without violating 
Federal anti-discrimination laws. The Secretary of Education encourages 
continued use of financial aid as a means to provide equal educational 
opportunity and to provide a diverse educational environment for all 
students. The Secretary also encourages the use by postsecondary 
institutions of other efforts to recruit and retain minority students, 
which are not affected by this policy guidance.
    This guidance is designed to promote these purposes in light of 
Title VI of the Civil Rights Act of 1964 (Title VI), which states that 
no person in the United States shall, on the ground of race, color, or 
national origin, be excluded from participation in, be denied the 
benefits of, or be subjected to discrimination under any program or 
activity receiving Federal financial assistance.
    The Department has completed its review of this issue, taking into 
account the results of a recent study by the General Accounting Office 
(GAO) and public comments submitted in response to the proposed policy 
guidance. The Secretary has determined that the proposed policy 
guidance interpreted the requirements of Title VI too narrowly in light 
of existing regulations and case law. While Title VI requires that 
strong justifications exist before race or national origin is used as a 
basis for awarding financial aid, many of the rationales for existing 
race-based financial aid programs described by commenters appear to 
meet this standard.
    The recent report by GAO on current financial aid programs does not 
indicate the existence of serious problems of noncompliance with the 
law in postsecondary institutions. That report found that race-targeted 
scholarships constitute a very small percentage of the scholarships 
awarded to students at postsecondary institutions. The Secretary 
anticipates that most existing programs will be able to satisfy the 
principles set out in this final guidance.
    The Department will use the principles described in this final 
policy guidance in making determinations concerning discrimination 
based on race or national origin in the award of financial aid. These 
principles describe the circumstances in which the Department, based on 
its interpretation of Title VI and relevant case law, believes 
consideration of race or national origin in the award of financial aid 
to be permissible. A financial aid program that falls within one or 
more of these principles will be, in the Department's view, in 
compliance with Title VI.1 This guidance is intended to assist 
colleges in fashioning legally defensible affirmative action programs 
to promote the access of minority students to postsecondary education. 
The Department will offer technical assistance to colleges in 
reexamining their financial aid programs based on this guidance.
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    \1\In identifying these principles, the Department is not 
foreclosing the possibility that there may be other bases on which a 
college may support its consideration of race or national origin in 
awarding financial aid. The Department will consider any 
justifications that are presented during the course of a Title VI 
investigation on a case-by-case basis.
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    This notice consists of five simply stated principles and a section 
containing a legal analysis for each principle. The legal analysis 
addresses the major comments received in response to the notice of 
proposed policy guidance.

Summary of Changes in the Final Policy Guidance

    Almost 600 written responses were received by the Department in 
response to the proposed policy guidance, many with detailed 
suggestions and analysis. Many additional suggestions and concerns were 
raised in meetings between Department officials and representatives of 
postsecondary institutions and civil rights groups. The vast majority 
of comments expressed support for the objective of clarifying the 
options colleges have to use financial aid to promote student diversity 
and access of minorities to postsecondary education without violating 
Title VI. Many comments, however, took issue with specific principles 
in the proposed policy guidance and questioned whether those principles 
would be effective in accomplishing this purpose.
    As more fully explained in the legal analysis section of this 
document, after reviewing the public comments and reexamining the legal 
precedents in light of those comments, the Department has revised the 
policy guidance in the following respects:
    (1) Principle 3--``Financial Aid to Remedy Past Discrimination''--
has been amended to permit a college to award financial aid based on 
race or national origin as part of affirmative action to remedy the 
effects of its past discrimination without waiting for a finding to be 
made by the Office for Civil Rights (OCR), a court, or a legislative 
body, if the college has a strong basis in evidence of discrimination 
justifying the use of race-targeted scholarships.
    (2) Principle 4--``Financial Aid to Create Diversity''--has been 
amended to permit the award of financial aid on the basis of race or 
national origin if the aid is a necessary and narrowly tailored means 
to accomplish a college's goal to have a diverse student body that will 
enrich its academic environment.
    (3) Principle 5--``Private Gifts Restricted by Race or National 
Origin''--has been amended to clarify that a college can administer 
financial aid from private donors that is restricted on the basis of 
race or national origin only if that aid is consistent with the other 
principles in this policy guidance.
    (4) A provision has been added to permit historically black 
colleges and universities (HBCUs) to participate in race-targeted 
programs for black students established by third parties if the 
programs are not limited to students at HBCUs.
    (5) Provisions in the proposed policy guidance for a transition 
period have been revised to provide that, as far as the Department's 
enforcement efforts are concerned--
    (a) Colleges and other recipients of federal financial assistance 
will have a reasonable period of time--up to two years--to review their 
financial aid programs and to make any adjustments necessary to come 
into compliance with the principles in this final policy guidance;
    (b) No student who has received or applied for financial aid at the 
time this guidance becomes effective will lose aid as a result of this 
guidance. Thus, if an award of financial aid is inconsistent with the 
principles in this guidance, a college or other recipient of Federal 
financial assistance may continue to provide the aid to a student 
during the course of his or her enrollment in the academic program for 
which the aid was awarded, if the student had either applied for or 
received the aid prior to the effective date of this policy guidance.

Principles

Definitions

    For purposes of these principles--
    College means any postsecondary institution that receives federal 
financial assistance from the Department of Education.
    Financial aid includes scholarships, grants, loans, work-study, and 
fellowships that are made available to assist a student to pay for his 
or her education at a college.
    Race-neutral means not based, in whole or in part, on race or 
national origin.
    Race-targeted, race-based, and awarded on the basis of race or 
national origin mean limited to individuals of a particular race or 
races or national origin or origins.

Principle 1: Financial Aid for Disadvantaged Students

    A college may make awards of financial aid to disadvantaged 
students, without regard to race or national origin, even if that means 
that these awards go disproportionately to minority students.
    Financial aid may be earmarked for students from low-income 
families. Financial aid also may be earmarked for students from school 
districts with high dropout rates, or students from single-parent 
families, or students from families in which few or no members have 
attended college. None of these or other race-neutral ways of 
identifying and providing aid to disadvantaged students present Title 
VI problems. A college may use funds from any source to provide 
financial aid to disadvantaged students.

Principle 2: Financial Aid Authorized by Congress

    A college may award financial aid on the basis of race or national 
origin if the aid is awarded under a Federal statute that authorizes 
the use of race or national origin.

Principle 3: Financial Aid To Remedy Past Discrimination

    A college may award financial aid on the basis of race or national 
origin if the aid is necessary to overcome the effects of past 
discrimination. A finding of discrimination may be made by a court or 
by an administrative agency--such as the Department's Office for Civil 
Rights. Such a finding may also be made by a State or local legislative 
body, as long as the legislature has a strong basis in evidence 
identifying discrimination within its jurisdiction for which that 
remedial action is necessary.
    In addition, a college may award financial aid on the basis of race 
or national origin to remedy its past discrimination without a formal 
finding of discrimination by a court or by an administrative or 
legislative body. The college must be prepared to demonstrate to a 
court or administrative agency that there is a strong basis in evidence 
for concluding that the college's action was necessary to remedy the 
effects of its past discrimination. If the award of financial aid based 
on race or national origin is justified as a remedy for past 
discrimination, the college may use funds from any source, including 
unrestricted institutional funds and privately donated funds restricted 
by the donor for aid based on race or national origin.
    A State may award financial aid on the basis of race or national 
origin, under the preceding standards, if the aid is necessary to 
overcome its own past discrimination or discrimination at colleges in 
the State.

Principle 4: Financial Aid To Create Diversity

    America is unique because it has forged one Nation from many people 
of a remarkable number of different backgrounds. Many colleges seek to 
create on campus an intellectual environment that reflects that 
diversity. A college should have substantial discretion to weigh many 
factors--including race and national origin--in its efforts to attract 
and retain a student population of many different experiences, 
opinions, backgrounds, and cultures--provided that the use of race or 
national origin is consistent with the constitutional standards 
reflected in Title VI, i.e., that it is a narrowly tailored means to 
achieve the goal of a diverse student body.
    There are several possible options for a college to promote its 
First Amendment interest in diversity. First, a college may, of course, 
use its financial aid program to promote diversity by considering 
factors other than race or national origin, such as geographic origin, 
diverse experiences, or socioeconomic background. Second, a college may 
consider race or national origin with other factors in awarding 
financial aid if the aid is necessary to further the college's interest 
in diversity. Third, a college may use race or national origin as a 
condition of eligibility in awarding financial aid if this use is 
narrowly tailored, or, in other words, if it is necessary to further 
its interest in diversity and does not unduly restrict access to 
financial aid for students who do not meet the race-based eligibility 
criteria.
    Among the considerations that affect a determination of whether 
awarding race-targeted financial aid is narrowly tailored to the goal 
of diversity are (1) whether race-neutral means of achieving that goal 
have been or would be ineffective; (2) whether a less extensive or 
intrusive use of race or national origin in awarding financial aid as a 
means of achieving that goal has been or would be ineffective; (3) 
whether the use of race or national origin is of limited extent and 
duration and is applied in a flexible manner; (4) whether the 
institution regularly reexamines its use of race or national origin in 
awarding financial aid to determine whether it is still necessary to 
achieve its goal; and (5) whether the effect of the use of race or 
national origin on students who are not beneficiaries of that use is 
sufficiently small and diffuse so as not to create an undue burden on 
their opportunity to receive financial aid.
    If the use of race or national origin in awarding financial aid is 
justified under this principle, the college may use funds from any 
source.

Principle 5: Private Gifts Restricted by Race or National Origin

    Title VI does not prohibit an individual or an organization that is 
not a recipient of Federal financial assistance from directly giving 
scholarships or other forms of financial aid to students based on their 
race or national origin. Title VI simply does not apply.
    The provisions of Principles 3 and 4 apply to the use of race-
targeted privately donated funds by a college and may justify awarding 
these funds on the basis of race or national origin if the college is 
remedying its past discrimination pursuant to Principle 3 or attempting 
to achieve a diverse student body pursuant to Principle 4. In addition, 
a college may use privately donated funds that are not restricted by 
their donor on the basis of race or national origin to make awards to 
disadvantaged students as described in Principle 1.

Additional Guidance

Financial Aid at Historically Black Colleges and Universities

    Historically black colleges and universities (HBCUs), as defined in 
Title III of the Higher Education Act (Title III), 20 U.S.C. 1061, are 
unique among institutions of higher education in America because of 
their role in serving students who were denied access to postsecondary 
education based on their race.2 Congress has made numerous 
findings reflecting the special role and needs of these institutions in 
light of the history of discrimination by States and the Federal 
Government against both the institutions and their students and has 
required enhancement of these institutions as a remedy for this history 
of discrimination.
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    \2\Title III states a number of requirements that an institution 
must meet in order to be considered an historically black college or 
university, including the requirement that the college or university 
was established prior to 1964. 20 U.S.C. 1061. In regulations 
implementing Title III, the Secretary has identified the 
institutions that meet these requirements. 34 CFR 608.2(b).
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    Based upon the extensive congressional findings concerning HBCUs, 
and consistent with congressional and Executive Branch efforts to 
enhance and strengthen HBCUs, the Department interprets Title VI to 
permit these institutions to participate in student aid programs 
established by third parties that target financial aid to black 
students, if those programs are not limited to students at the HBCUs. 
These would include programs to which HBCUs contribute their own 
institutional funds if necessary for participation in the programs. 
Precluding HBCUs from these programs would have an unintended negative 
effect on their ability to recruit talented student bodies and would 
undermine congressional actions aimed at enhancing these institutions. 
HBCUs may not create their own race-targeted programs using 
institutional funds, nor may they accept privately donated race-
targeted aid limited to students at the HBCUs, unless they satisfy the 
requirements of any of the other principles in this guidance.3
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    \3\For example, an HBCU might award race-targeted aid to Mexican 
American students or to white students to promote diversity under 
Principle 4.
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Transition Period

    Although the Department anticipates that most financial aid 
programs that consider race or national origin in awarding assistance 
will be found to be consistent with one or more of the principles in 
this final policy guidance, there will be some programs that require 
adjustment to comply with Title VI. In order to permit colleges time to 
assess their programs and to make any necessary adjustments in an 
orderly manner--and to ensure that students who already have either 
applied for or received financial aid do not lose their student aid as 
a result of the issuance of this policy guidance--there will be a 
transition period during which the Department will work with colleges 
that require assistance to bring them into compliance.4
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    \4\This transition period also applies to recipients of Federal 
financial assistance that are not colleges, e.g., a nonprofit 
organization that operates a scholarship program.
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    The Department will afford colleges up to two academic years to 
adjust their programs for new students. However, to the extent that a 
college does not need the full two years to make adjustments to its 
financial aid programs, the Department expects that the adjustments 
will be made as soon as practicable.
    No student who is currently receiving financial aid, or who has 
applied for aid prior to the effective date of this policy guidance, 
should lose aid as a result of this guidance. Thus, if a college 
determines that a financial aid program is not permissible under this 
policy guidance, the college may continue to provide assistance awarded 
on the basis of race or national origin to students during the entire 
course of their academic program at the college, even if that period 
extends beyond the two-year transition period, if the students had 
either applied for or received that assistance prior to the effective 
date of this policy.

Legal Analysis

Introduction

    The Department of Education is responsible for enforcing Title VI 
of the Civil Rights Act of 1964, 42 U.S.C. 2000d et seq., at 
institutions receiving Federal education funds. Section 601 of Title VI 
provides that no person in the United States shall, on the ground of 
race, color, or national origin, be excluded from participation in, be 
denied the benefits of, or be subjected to discrimination under any 
program or activity receiving Federal financial assistance. 42 U.S.C. 
2000d.
    The Department has issued regulations implementing Title VI that 
are applicable to all recipients of financial assistance from the 
Department. 34 CFR part 100. The regulations prohibit discrimination in 
the administration of financial aid programs. Specifically, they 
prohibit a recipient, on the basis of race, color, or national origin, 
from denying financial aid; providing different aid; subjecting anyone 
to separate or different treatment in any matter related to financial 
aid; restricting the enjoyment of any advantage or privilege enjoyed by 
others receiving financial aid; and treating anyone differently in 
determining eligibility or other requirements for financial aid. 34 CFR 
100.3(b)(1); see also 34 CFR 100.3(b)(2).
    In addition to prohibiting discrimination, the Title VI regulations 
require that a recipient that has previously discriminated ``must take 
affirmative action to overcome the effects of prior discrimination.'' 
34 CFR 100.3(b)(6)(i). The regulations also permit recipients to take 
voluntary affirmative action ``[e]ven in the absence of such prior 
discrimination * * * to overcome the effects of conditions which 
resulted in limiting participation by persons of a particular race, 
color, or national origin'' in the recipient's programs. 34 CFR 
100.3(b)(6)(ii); see 34 CFR 100.5(i).
    The permissibility of awarding student financial aid based, in 
whole or in part, on a student's race or national origin involves an 
interpretation of the preceding provisions concerning affirmative 
action. The Supreme Court has made clear that Title VI prohibits 
intentional classifications based on race or national origin for the 
purpose of affirmative action to the same extent and under the same 
standards as the Equal Protection Clause of the Fourteenth 
Amendment.5 Guardians Ass'n v. Civil Service Commission of the 
City of New York, 463 U.S. 582 (1983); Regents of the University of 
California v. Bakke, 438 U.S. 265 (1978). Thus, the Department's 
interpretation of the general language of the Title VI regulations 
concerning permissible affirmative action is based on case law under 
both Title VI and the Fourteenth Amendment.
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    \5\Some commenters suggested that Native Americans and Native 
Hawaiians--because of their special relationship with the Federal 
Government--should be exempt from the restrictions outlined in the 
policy guidance. The Department has found no legal authority for 
treating affirmative action by recipients of Federal assistance any 
differently if the group involved is Native Americans or Native 
Hawaiians. Thus, the principles in this policy guidance--including 
Principle 2, which states that a college may award financial aid on 
the basis of race or national origin if authorized by Federal 
statute--apply to financial aid that is limited to Native Americans 
and Native Hawaiians. However, the policy does not address the 
authority of tribal governments or tribally controlled colleges to 
restrict aid to members of their tribes.
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    The following discussion addresses the legal basis for each of the 
five principles set out in the Department's policy guidance.
1. Financial Aid for Disadvantaged Students
    The first principle provides that colleges may award financial aid 
to disadvantaged students. Colleges are free to define the 
circumstances under which students will be considered to be 
disadvantaged, as long as that determination is not based on race or 
national origin.
    As some commenters noted, the Title VI regulations prohibit actions 
that, while not intentionally discriminatory, have the effect of 
discriminating on the basis of race or national origin. 34 CFR 
100.3(b)(2); see Guardians Ass'n v. Civil Service Commission of the 
City of New York, supra; Lau v. Nichols, 414 U.S. 563 (1974). However, 
actions that have a disproportionate effect on students of a particular 
race or national origin are permissible under Title VI if they bear a 
``manifest demonstrable relationship'' to the recipient's educational 
mission. Georgia State Conference of Branches of NAACP v. State of 
Georgia, 775 F.2d 1403, 1418 11th Cir. (1985). It is the Department's 
view that awarding financial aid to disadvantaged students provides a 
sufficiently strong educational purpose to justify any racially 
disproportionate effect the use of this criterion may entail. In 
particular, the Department believes that an applicant's character, 
motivation, and ability to overcome economic and educational 
disadvantage are educationally justified considerations in both 
admission and financial aid decisions. Therefore, the award of 
financial assistance to disadvantaged students does not violate Title 
VI.
2. Financial Aid Authorized by Congress
    This principle states that a college may award financial aid on the 
basis of race or national origin if the use of race or national origin 
in awarding that aid is authorized by Federal statute. This is because 
financial aid programs for minority students that are authorized by a 
specific Federal law cannot be considered to violate another Federal 
law, i.e., Title VI. In the case of the establishment of federally 
funded financial aid programs, such as the Patricia Roberts Harris 
Fellowship, the authorization of specific minority scholarships by that 
legislation prevails over the general prohibition of discrimination in 
Title VI.6 This result also is consistent with the canon of 
construction under which the specific provisions of a statute prevail 
over the general provisions of the same or a different statute. See 2A 
N. Singer Sutherland Statutory Construction section 46.05 (5th ed. 
1992); Radzanower v. Touche Ross and Co., 426 U.S. 148, 153 (1976); 
Morton v. Mancari, 417 U.S. 535, 550-51 (1974); Fourco Glass Co. v. 
Transmira Products Corp., 353 U.S. 225, 228-29 (1957).
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    \6\Of course, an individual may challenge the statute under 
which the aid is provided as violative of the Constitution. The 
statute would then be evaluated under the constitutional standards 
for racial classifications authorized by Federal statute that were 
established in Metro Broadcasting, Inc. v. FCC, 497 U.S. 547 (1990) 
and Fullilove v. Klutznick, 448 U.S. 448 (1980). However, as 
explained previously, such a suit would not be viable under Title 
VI, for which the Department has enforcement responsibility.
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    Some commenters argued that the existence of congressionally 
authorized race-targeted financial aid programs supports the position 
that all race-targeted financial aid programs are permissible under 
Title VI. However, the fact that Congress has enacted specific Federal 
programs for race-targeted financial aid does not serve as an 
authorization for States or colleges to create their own programs for 
awarding student financial aid based on race or national origin.
3. Financial Aid To Remedy Past Discrimination
    Classifications based on race or national origin, including 
affirmative action measures, are ``suspect'' classifications that are 
subject to strict scrutiny by the courts. Regents of the University of 
California v. Bakke, 438 U.S. at 292. The use of those classifications 
must be based on a compelling governmental interest and must be 
narrowly tailored to serve that interest. Richmond v. J.A. Croson Co., 
488 U.S. 469 (1989); Wygant v. Jackson Board of Education, 476 U.S. 267 
(1986).
    The Supreme Court has repeatedly held that the Government has a 
compelling interest in ensuring the elimination of discrimination on 
the basis of race or national origin. To further this governmental 
interest, the Supreme Court has sanctioned the use of race-conscious 
measures to eliminate discrimination. United States v. Fordice, ______ 
U.S. ______ (1992); United States v. Paradise, 480 U.S. 149, 167 
(1987); Swann v. Charlotte-Mecklenberg Board of Education, 402 U.S. 1, 
15-16 (1971); McDaniel v. Barresi, 402 U.S. 39 (1971); Green v. County 
School Board of New Kent County, 391 U.S. 430, 438 (1968). Most 
recently, in United States v. Fordice, supra, the Court found that 
States that operated de jure systems of higher education have an 
affirmative obligation to ensure that no vestiges of the de jure system 
continue to have a discriminatory effect on the basis of race.
    The implementing regulations for Title VI provide that a recipient 
of Federal financial assistance that has previously discriminated in 
violation of the statute or regulations must take affirmative action to 
overcome the effects of the past discrimination. 34 CFR 100.3(b)(6)(i). 
Thus, a college that has been found to have discriminated against 
students on the basis of race or national origin must take steps to 
remedy that discrimination. That remedial action may include the 
awarding of financial aid to students from the racial or national 
origin groups that have been discriminated against.
    The proposed policy guidance provided that a finding of past 
discrimination could be made by a court or by an administrative agency, 
such as the Department's Office for Civil Rights. It also could be made 
by a State or local legislative body, as long as the legislature 
requiring the affirmative action had a strong basis in evidence 
identifying discrimination within its jurisdiction for which that 
remedial action is required.
    A number of commenters argued that colleges should be able to take 
remedial action without waiting for a formal finding by a court, 
administrative agency, or legislature. The Department agrees. The final 
policy guidance provides that, even in the absence of a finding by a 
court, legislature, or administrative agency, a college--in order to 
remedy its past discrimination--may implement a remedial race-targeted 
financial aid program. It may do so if it has a strong basis in 
evidence for concluding that this affirmative action is necessary to 
remedy the effects of its past discrimination and its financial aid 
program is narrowly tailored to remedy that discrimination. Permitting 
colleges to remedy the effects of their past discrimination without 
waiting for a formal finding is consistent with the approach taken by 
the Supreme Court in Wygant v. Jackson Board of Education, supra. In 
Wygant, the Court clarified that a school district's race-conscious 
voluntary affirmative action plan could be upheld based on subsequent 
judicial findings of past discrimination by the district. Wygant v. 
Jackson Board of Education, 476 U.S. at 277.
    In the Wygant case, teachers challenged their school board's 
adoption, through a collective bargaining agreement, of a layoff plan 
that included provisions protecting employees from layoffs on the basis 
of their race. The school board contended, among other things, that the 
plan's race-conscious layoff provisions were constitutional because 
they were adopted to remedy the school board's own prior 
discrimination. Id., at 276, 277. Justice Powell, in a plurality 
opinion, stated that a public employer must have ``convincing 
evidence'' that an affirmative action plan is warranted by past 
discrimination before undertaking that plan. Id., at 277. If the plan 
is challenged by employees who are harmed by the plan, the court must 
then make a determination that the employer had a ``strong basis in 
evidence for its conclusion that remedial action was necessary.'' Id.
    In a concurring opinion, Justice O'Connor agreed that a 
``contemporaneous or antecedent finding of past discrimination by a 
court was not a constitutional prerequisite to a public employer's 
voluntary agreement to an affirmative action plan.'' Id., at 289. She 
explained that contemporaneous or antecedent findings were not 
necessary because ``A violation of Federal statutory or constitutional 
requirements does not arise with the making of findings; it arises when 
the wrong is committed.'' Moreover, she explained that important values 
would be sacrificed if contemporaneous findings were required because 
``a requirement that public employers make findings that they engaged 
in illegal discrimination before they engage in affirmative action 
programs would severely undermine public employers' incentive to meet 
voluntarily their civil rights obligations.'' Id., at 289, 290 
(citations omitted).
    In Richmond v. J.A. Croson, supra, the Court again emphasized that 
remedial race-conscious action must be based on strong evidence of 
discrimination. That case involved the constitutionality of a city 
ordinance establishing a plan to remedy past discrimination by 
requiring prime contractors awarded city construction contracts to 
subcontract at least 30% of the dollar amount of each contract to 
minority-controlled businesses. The Court found that the city council 
had failed to make sufficient factual findings to demonstrate a 
``strong basis in evidence'' of racial discrimination ``by anyone in 
the Richmond construction industry.'' Richmond v. J.A. Croson, 488 U.S. 
at 500.
    Evidence of past discrimination may, but need not, include 
documentation of specific incidents of intentional discrimination. 
Instead, evidence of a statistically significant disparity between the 
percentage of minority students in a college's student body and the 
percentage of qualified minorities in the relevant pool of college-
bound high school graduates may be sufficient. Such an approach is 
analogous to cases of employment discrimination where the courts accept 
statistical evidence to infer intentional discrimination against 
minority job applicants. See Hazelwood School District v. United 
States, 433 U.S. 299 (1977).
    Based on this case law, Principle 3 provides that a college may 
award race-targeted scholarships to remedy discrimination as found by a 
court or by an administrative agency, such as the Department's Office 
for Civil Rights. OCR often has approved race-targeted financial aid 
programs as part of a Title VI remedial plan to eliminate the vestiges 
of prior discrimination within a State higher education system that 
previously was operated as a racially segregated dual system. As 
indicated by the Croson decision, a finding of past discrimination also 
may be made by a State or local legislative body, as long as the 
legislature has a strong basis in evidence identifying discrimination 
within its jurisdiction. The remedial use of race-targeted financial 
aid must be narrowly tailored to remedy the effects of the 
discrimination.
    As revised, Principle 3 also allows a college to award student aid 
on the basis of race or national origin as part of affirmative action 
to remedy the effects of the school's past discrimination without 
waiting for a finding to be made by OCR, a court, or a legislative 
body, if the college has convincing evidence of past discrimination 
justifying the affirmative action. The Department's Title VI 
regulations, like the Fourteenth Amendment, do not require that 
antecedent or contemporaneous findings of past discrimination be made 
before remedial affirmative action is implemented, as long as the 
college has a strong basis in evidence of its past discrimination. 
Allowing colleges to implement narrowly tailored remedial affirmative 
action if there is strong evidentiary support for it--without requiring 
that it be delayed until a finding is made by OCR, a court, or a 
legislative body--will assist in ensuring that Title VI's mandate 
against discrimination based on race or national origin is achieved.
4. Financial Aid To Create Diversity
    The Title VI regulations permit a college to take voluntary 
affirmative action, even in the absence of past discrimination, in 
response to conditions that have limited the participation at the 
college of students of a particular race or national origin. 34 CFR 
100.3(b)(6)(ii); see 34 CFR 100.5(i). In Regents of the University of 
California v. Bakke, supra, the Supreme Court considered whether the 
University could take voluntary affirmative action by setting aside 
places in each medical school class for which only minority students 
could compete.7
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    \7\The Court noted that the University ``does not purport to 
have made'' a determination that its affirmative action plan was 
necessary to remedy any past discrimination at the medical school. 
Regents of the University of California v. Bakke, 438 U.S. at 309.
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    The Court considered four rationales provided by the University of 
California for taking race and national origin into account in making 
admissions decisions: (1) To reduce the historic deficit of 
traditionally disfavored minorities in medical schools and the medical 
profession. (2) To counter the effects of societal discrimination. (3) 
To increase the number of physicians who would practice in communities 
lacking medical services. (4) To obtain the educational benefits of a 
diverse student body. Similar arguments have been advanced in response 
to the Department's proposed policy guidance on student financial 
assistance awarded on the basis of race or national origin.
    The Court rejected the first three justifications. The first reason 
was rejected as facially invalid because setting aside a fixed number 
of admission spaces only to ensure that members of a specified race are 
admitted was found to be racial ``discrimination for its own sake.'' 
Regents of the University of California v. Bakke, 438 U.S. at 307. In 
rejecting the second contention that the effects of societal 
discrimination warranted the racial preferences, the Court recognized 
that the State had a substantial interest in eliminating the effects of 
discrimination, but that interest was found to be limited to 
``redress[ing] the wrongs worked by specific instances of 
discrimination.'' Id. The third contention, concerning the provision of 
health care services to underserved communities, was rejected by the 
Bakke Court as an evidentiary matter because the State had ``not 
carried its burden of demonstrating that it must prefer members of 
particular ethnic groups over all other individuals in order to promote 
better health-care delivery to deprived citizens.'' Id., at 311.
    With respect to the final objective, the ``attainment of a diverse 
student body,'' Justice Powell found that--

    This clearly is a constitutionally permissible goal for an 
institution of higher education. Academic freedom, though not a 
specifically enumerated constitutional right, long has been viewed 
as a special concern of the First Amendment. The freedom of a 
university to make its own judgments as to education includes the 
selection of its student body.

Id., at 311, 312. Thus, colleges have a First Amendment right to seek 
diversity in admissions to fulfill their academic mission through the 
``robust exchange of ideas'' that flows from a diverse student body. 
Id., at 312-313.8 However, the means to achieve this 
``countervailing constitutional interest'' under the First Amendment 
must comport with the requirements of the Fourteenth Amendment. The 
Medical School's policy of setting aside a fixed number of admission 
spaces solely for minorities was found not to pass the Fourteenth 
Amendment's strict scrutiny test, because the policy's use of race as a 
condition of eligibility for the slots was not necessary to promote the 
school's diversity interest. Id., at 315-316. Justice Powell found that 
the Medical School could advance its diversity interest under the First 
Amendment in a narrowly tailored manner that passed the Fourteenth 
Amendment's strict scrutiny test by using race or national origin as 
one of several factors that would be considered as a plus factor for an 
applicant in the admissions process. Id., at 317-319.
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    \8\The Secretary believes that a college's academic freedom 
interest in the ``robust exchange of ideas'' also includes an 
interest in the existence of a diverse faculty and, more generally, 
in diversity of professors nationally, since scholars engage in the 
interchange of ideas with others in their field, and not merely with 
faculty at their particular school. A university could contribute to 
this interest by enrolling graduate students who are committed to 
becoming professors and who will promote the overall diversity of 
scholars in their field of study, regardless of the diversity of the 
students who are admitted to the university's own graduate program.
---------------------------------------------------------------------------

    Following the Bakke decision, the Department reexamined its Title 
VI regulations to determine whether any changes were necessary. In a 
policy interpretation published in the Federal Register (44 FR 58509), 
the Department concluded that no change was warranted. The Department 
determined that the Title VI regulatory provision authorizing voluntary 
affirmative action was consistent with the Court's decision and that 
the provision would be interpreted to incorporate the limitations on 
voluntary affirmative action announced by the Court.9 Thus, if a 
college's use of race or national origin in awarding financial aid 
meets the Supreme Court's test under the Fourteenth Amendment for 
permissible voluntary affirmative action, it will also meet the 
requirements of Title VI.
---------------------------------------------------------------------------

    \9\The present policy guidance on student financial assistance 
supplements the 1979 policy interpretation.
---------------------------------------------------------------------------

    In the Department's proposed policy guidance on financial aid, a 
principle was included permitting the use of race or national origin as 
a ``plus'' factor in awarding student aid. The basis for the principle 
was the Bakke decision and the Department's assessment that using an 
approach that had been approved by the Supreme Court as narrowly 
tailored to achieve diversity in the admissions context also would be 
permissible in awarding financial aid.10
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    \1\0The Department will presume that a college's use of race or 
national origin as a plus factor, with other factors, is narrowly 
tailored to further the compelling governmental interest in 
diversity, as long as the college periodically reexamines whether 
its use of race or national origin as a plus factor continues to be 
necessary to achieve a diverse student body.
---------------------------------------------------------------------------

    In response to the proposed policy, many colleges submitted 
comments arguing that the use of race or national origin as a plus 
factor in awarding financial aid may be inadequate to achieve 
diversity. They contended that, in some cases, it may be necessary to 
designate a limited amount of aid for students of a particular race or 
national origin. According to those commenters, a college's financial 
aid program can serve a critical role in achieving a diverse student 
body in at least three respects: First, the availability of financial 
aid set aside for members of a particular race or national origin 
serves as a recruitment tool, encouraging applicants to consider the 
school. Second, it provides a means of encouraging students who are 
offered admission to accept the offer and enroll at the school. 
Finally, it assists colleges in retaining students until they complete 
their program of studies.
    The commenters argued that a college--because of its location, its 
reputation (whether deserved or not) of being inhospitable to minority 
students, or its number of minority graduates--may be unable to recruit 
sufficient minority applicants even if race or national origin is 
considered a positive factor in admissions and the award of aid. That 
is, the failure to attract a sufficient number of minority applicants 
who meet the academic requirements of the college will make it 
impossible for the college to enroll a diverse student body, even if 
race or national origin is given a competitive ``plus'' in the 
admissions process. In addition, a college that has sufficient minority 
applicants to offer admission to a diverse group of applicants may find 
that, absent the availability of financial aid set aside for minority 
students, its offers of admission are disproportionately rejected by 
minority applicants.
    Furthermore, commenters were concerned that, while there may be 
large amounts of financial aid available for undergraduates at their 
institutions, there may be insufficient aid for graduate students, 
almost all of whom are able to demonstrate financial need. Thus, it is 
possible that a college that is able to achieve a diverse student body 
in some of its programs using race-neutral financial aid criteria or 
using race or national origin as a ``plus'' factor may find it 
necessary to use race or national origin as a condition of eligibility 
in awarding limited amounts of financial aid to achieve diversity in 
some of its other programs, such as its graduate school or particular 
undergraduate schools.
    The Department agrees with the commenters that in the circumstances 
they have described it may be necessary for a college to set aside 
financial aid to be awarded on the basis of race or national origin in 
order to achieve a diverse student body. Whether a college's use of 
race-targeted financial aid is ``narrowly tailored'' to achieve this 
compelling interest involves a case-by-case determination that is based 
on the particular circumstances involved. The Department has 
determined, based on the comments, to expand Principle 4 to permit 
those case-by-case determinations.
    The Court in Bakke indicated that race or national origin could be 
used in making admissions decisions to further the compelling interest 
of a diverse student body even though the effect might be to deny 
admission to some students who did not receive a competitive ``plus'' 
based on race or ethnicity.11 However, the use of a set-aside of 
places in the entering class was impermissible because it was not 
necessary to the goal of diversity. In cases since Bakke, the Supreme 
Court has provided additional guidance on the factors to be considered 
in determining whether a classification based on race or national 
origin is narrowly tailored to its purpose. These factors will be 
considered by the Department in assessing whether a college's race-
targeted financial aid program meets the requirements of Title VI.
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    \1\1Bakke was the Supreme Court's first decision in an 
affirmative action case. Since that time, the Court has decided a 
number of affirmative action cases, none of which have invalidated 
Justice Powell's opinion in Bakke that the promotion of diversity in 
the higher education setting is a compelling interest.
---------------------------------------------------------------------------

    First, it is necessary to determine the efficacy of alternative 
approaches. United States v. Paradise, 480 U.S. at 171. Thus, it is 
important that consideration has been given to the use of alternative 
approaches that are less intrusive (e.g., the use of race or national 
origin as a ``plus'' factor rather than as a condition of eligibility). 
Metro Broadcasting, Inc. v. F.C.C., 497 U.S. at 583; Richmond v. J.A. 
Croson, 488 U.S. at 507. Financial aid that is restricted to students 
of a particular race or national origin should be used only if a 
college determines that these alternative approaches have not or will 
not be effective.
    Second, the extent, duration, and flexibility of the racial 
classification must be addressed. Metro Broadcasting, Inc. v. F.C.C., 
497 U.S. at 594; United States v. Paradise, 480 U.S. at 171. The extent 
of the use of the classification should be no greater than is necessary 
to carry out its purpose. Richmond v. J.A. Croson, 488 U.S. at 507. 
That is, the amount of financial aid that is awarded based on race or 
national origin should be no greater than is necessary to achieve a 
diverse student body.
    The duration of the use of a racial classification should be no 
longer than is necessary to its purpose, and the classification should 
be periodically reexamined to determine whether there is a continued 
need for its use. Metro Broadcasting, Inc. v. F.C.C., 497 U.S. at 594. 
Thus, the use of race-targeted financial aid should continue only while 
it is necessary to achieve a diverse student body, and an assessment as 
to whether that continues to be the case should be made on a regular 
basis.
    In addition, the use of the classification should be sufficiently 
flexible that exceptions can be made if appropriate. For example, the 
Supreme Court in United States v. Paradise found that a race-conscious 
promotion requirement was flexible in operation because it could be 
waived if no qualified candidates were available. 480 U.S. at 177. 
Similarly, racial restrictions on the award of financial aid could be 
waived if there were no qualified applicants.
    Finally, the burden on those who are excluded from the benefit 
conferred by the classification based on race or national origin (i.e., 
non-minority students) must be considered. Id., at 171. A use of race 
or national origin may impose such a severe burden on particular 
individuals--for example, eliminating scholarships currently received 
by non-minority students in order to start a scholarship program for 
minority students--that it is too intrusive to be considered narrowly 
tailored. See Wygant v. Jackson Board of Education, 476 U.S. at 283 
(use of race in imposing layoffs involves severe disruption to lives of 
identifiable individuals). Generally, the less severe and more diffuse 
the impact on non-minority students, the more likely a classification 
based on race or national origin will address this factor 
satisfactorily. However, it is not necessary to show that no student's 
opportunity to receive financial aid has been in any way diminished by 
the use of the race-targeted aid. Rather, the use of race-targeted 
financial aid must not place an undue burden on students who are not 
eligible for that aid.
    A number of commenters argued that race-targeted financial aid is a 
minimally intrusive method to attain a diverse student body, far more 
limited in its impact on non-minority students, for example, than race-
targeted admissions policies. Under this view, and unlike the 
admissions plan at issue in Bakke, a race-targeted financial aid award 
could be a narrowly tailored means of achieving the compelling interest 
in diversity.
    The Department agrees that there are important differences between 
admissions and financial aid. The affirmative action admissions program 
struck down in Bakke had the effect of excluding applicants from the 
university on the basis of their race. The use of race-targeted 
financial aid, on the other hand, does not, in and of itself, dictate 
that a student would be foreclosed from attending a college solely on 
the basis of race. Moreover, in contrast to the number of admissions 
slots, the amount of financial aid available to students is not 
necessarily fixed. For example, a college's receipt of privately 
donated monies restricted to an underrepresented group might increase 
the total pool of funds for student aid in a situation in which, absent 
the ability to impose such a limitation, the donor might not provide 
any aid at all.
    Even in the case of a college's own funds, a decision to bar the 
award of race-targeted financial aid will not necessarily translate 
into increased resources for students from non-targeted groups. Funds 
for financial aid restricted by race or national origin that are viewed 
as a recruitment device might be rechanneled into other methods of 
recruitment if restricted financial aid is barred. In other words, 
unlike admission to a class with a fixed number of places, the amount 
of financial aid may increase or decrease based on the functions it is 
perceived to promote.
    In summary, a college can use its financial aid program to promote 
diversity by considering factors other than race or national origin, 
such as geographic origin, diverse experiences, or socioeconomic 
background. In addition, a college may take race or national origin 
into account as one factor, with other factors, in awarding financial 
aid if necessary to promote diversity. Finally, a college may use race 
or national origin as a condition of eligibility in awarding financial 
aid if it is narrowly tailored to promote diversity.
5. Private Gifts Restricted by Race or National Origin
    The fifth principle sets out the circumstances under which a 
recipient college can award financial aid provided by private donors 
that is restricted on the basis of race or national origin.
    As noted by many commenters, pursuant to the Civil Rights 
Restoration Act of 1987, all of the operations of a college are covered 
by Title VI if the college receives any Federal financial assistance. 
42 U.S.C. 2000d-4a(2)(A). Since a college's award of privately donated 
financial aid is within the operations of the college, the college must 
comply with the requirements of Title VI in awarding those 
funds.12
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    \1\2Similarly, other organizations that receive Federal 
financial assistance must comply with Title VI in their award of 
student financial aid. On the other hand, individuals or 
organizations not receiving Federal funds are not subject to Title 
VI. They may thus, as far as Title VI is concerned, directly award 
financial aid to students on the basis of race or national origin.
---------------------------------------------------------------------------

    A college may award privately donated financial aid on the basis of 
race or national origin if the college is remedying its past 
discrimination pursuant to Principle 3 or attempting to achieve a 
diverse student body pursuant to Principle 4. In other words, 
Principles 3 and 4 apply to the use of privately donated funds and may 
justify awarding these funds on the basis of race or national origin in 
accordance with the wishes of the donor. Similarly, under Principle 1, 
a college may award privately donated financial aid that is restricted 
to disadvantaged students.
    Some commenters were uncertain whether it is permissible under 
Title VI for a college to solicit private donations of student 
financial aid that are restricted to students of a particular race or 
national origin. If the receipt and award of these funds is permitted 
by Title VI, that is, in the circumstances previously described, it is 
similarly permissible to solicit the funds from private sources.

Financial Aid at Historically Black Colleges and Universities

    To ensure that the principles in this policy guidance do not 
subvert congressional efforts to enhance historically black colleges 
and universities (HBCUs), these institutions may participate in student 
aid programs established by third parties for black students that are 
not limited to students at the HBCUs and may use their own 
institutional funds in those programs if necessary for 
participation.13 See 20 U.S.C. 1051, 1060, and 1132c 
(congressional findings of past discrimination against HBCUs and of the 
need for enhancement).
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    \1\3This provision is limited to HBCUs as defined in Title III 
of the Higher Education Act. It does not apply generally to 
predominantly black institutions of higher education. The reason for 
this distinction is that Congress has made specific findings 
concerning the unique status of the HBCUs that serve as the basis 
for this provision.
---------------------------------------------------------------------------

    This finding is based upon congressional findings of past 
discrimination against HBCUs and the students they have traditionally 
served, as well as the Department's determination that these 
institutions and their students would be harmed if precluded from 
participation in programs created by third parties that designate 
financial aid for black students. That action would have an unintended 
negative effect on their ability to recruit excellent student bodies 
and could undermine congressional actions aimed at enhancing these 
institutions.
    Congress has repeatedly made findings that recognize the unique 
historical mission and important role that HBCUs play in the American 
system of higher education, and particularly in providing equal 
educational opportunity for black students. 20 U.S.C. 1051, 1060, and 
1132c. Congress has created programs that strengthen and enhance HBCUs 
in Titles II through VII of the Higher Education Act, as amended by 
Public Law 99-498, 20 U.S.C. 1021-1132i-2. It has found that ``there is 
a particular national interest in aiding institutions of higher 
education that have historically served students who have been denied 
access to postsecondary education because of race or national origin . 
. . so that equality of access and quality of postsecondary education 
opportunities may be enhanced for all students.'' 20 U.S.C. 1051. ``A 
key link to the chain of expanding college opportunity for African 
American youth is strengthening the Nation's historically Black 
colleges and universities.'' House Report No. 102-447, 1992 U.S. Code 
Cong. and Adm. News p. 353.
    Congress has found that ``the current state of HBCUs is partly 
attributable to the discriminatory action of the States and the Federal 
Government and this discriminatory action requires the remedy of 
enhancement of Black postsecondary institutions to ensure their 
continuation and participation in fulfilling the Federal mission of 
equality of educational opportunity.'' 20 U.S.C. 1060. See also, House 
Report No. 102-447, 1992 U.S. Code Cong. and Adm. News p. 353; House 
Report No. 99-383, 1986 U.S. Code Cong. and Adm. News 2592-2596. This 
includes providing access and quality education to low-income and 
minority students, and improving HBCUs' academic quality. 20 U.S.C. 
1051.
    For these same reasons, every Administration in recent years has 
recognized the special role and contributions of HBCUs and expressed 
support for their enhancement. See ``Revised Criteria Specifying the 
Ingredients of Acceptable Plans to Desegregate State Systems of Public 
Higher Education,'' 43 FR 6658 (1977); Exec. Orders Nos. 12232, 45 FR 
53437 (1980); 12320, 46 FR 48107 (1981); 12677, 54 FR 18869 (1989); and 
12876, 58 FR 58735 (1993). The Department's own data indicate that 
HBCUs continue to play a vital role in providing higher education for 
many black students. In 1989 and 1990, more than one in four black 
bachelor's degree recipients received their degree from an HBCU 
(26.7%). See, ``Historically Black Colleges and Universities, 1976-90'' 
(U.S. Department of Education, Office of Educational Research and 
Improvement, July 1992).
    This policy guidance is not intended to limit the efforts to 
enhance HBCUs called for by Congress and the President. The Department 
recognizes, however, that Principle 3 (remedying past discrimination) 
and Principle 4 (creating diversity) may not provide for HBCUs the same 
possibility of participating in race-targeted programs of financial aid 
for black students established by third parties as are provided for 
other colleges and universities. As some commenters pointed out, HBCUs 
continue to enroll a disproportionate percentage of black students and 
need to be able to compete for the most talented black students if they 
are to improve the quality and prestige of their academic environments 
and, therefore, enhance their attractiveness to all students regardless 
of race or national origin.
    HBCUs' abilities to recruit, enroll and retain talented students 
will be undermined unless HBCUs are permitted to attract talented black 
students by participating in aid programs for black students that are 
established by third parties in which other colleges, i.e., those that 
meet Principle 3 or 4, participate. Limiting or precluding HBCUs' 
participation in private programs, such as the National Achievement 
Scholarship program, would have an unintended negative effect on their 
ability to recruit a talented student body. Under this scholarship 
program, which is restricted to academically excellent black students, 
one type of National Achievement Scholarship is funded by the 
institution. If HBCUs were unable to participate in this program, some 
top black students might be forced to choose between (1) receiving a 
National Achievement Scholarship to attend a school that met Principle 
3 or 4 and (2) attending an HBCU. For these reasons, the Department 
interprets Title VI to permit HBCUs to participate in certain race-
targeted aid programs for black students, such as the National 
Achievement Scholarship program.
    The Department reads Title VI consistent with other statutes and 
Executive orders addressing the special needs and history of HBCUs. In 
particular, the Department notes congressional findings of 
discrimination against black students that are the basis for 
enhancement efforts at HBCUs. Additionally, the Department interprets 
Title VI to permit limited use of race to avoid an anomalous and absurd 
result, i.e., penalizing HBCUs and students who seek admission to 
HBCUs, and putting HBCUs at a disadvantage with respect to other 
schools precisely because of the special history and composition of the 
HBCUs.
    The use of race-targeted aid by HBCUs that the Department is 
interpreting Title VI to permit under this provision is narrowly 
tailored to further the congressionally recognized purpose of 
enhancement of HBCUs. HBCUs may not discriminate on the basis of race 
or national origin in admitting students. They may not create their own 
race-targeted financial aid programs using their own institutional 
funds unless they satisfy the requirements of any of the other 
principles in this guidance. Nor may they accept private donations of 
race-targeted aid for black students that are limited to students at 
the institution unless otherwise permitted by the guidance. Because 
HBCUs have traditionally enrolled black students, it should not subvert 
the goal of enhancing the institutions to require that they not 
restrict aid to black students if using their own funds or funds from 
private donors that wish to set up financial aid programs at these 
institutions. However, because the applicant pool that is attracted to 
HBCUs presently consists primarily of black students, HBCUs would be 
placed at a distinct disadvantage with regard to other colleges in 
attracting talented students if they could not participate in financial 
aid programs set up by third parties for black students. Thus, the 
Department interprets Title VI to permit an HBCU to participate in 
race-targeted financial aid programs for black students that are 
created by third parties, if the programs are not restricted to 
students at HBCUs.
    The participation by HBCUs in those race-targeted aid programs will 
be subject to periodic reassessment by the Department. The Department 
will regularly review the results of enhancement efforts at HBCUs, 
including the annual report to the President on the progress achieved 
in enhancing the role and capabilities of HBCUs required by Section 7 
of Executive Order 12876. If an HBCU has been enhanced to the point 
that the institution is attractive to individuals regardless of their 
race or national origin to the same extent as a non-HBCU, then that 
institution may participate in only those race-targeted aid programs 
that are consistent with the other principles in this policy guidance.

Transition Period

    The proposed policy guidance would have provided a four-year 
transition period for individual students to ensure that they did not 
lose their financial aid as a result of the guidance. Commenters 
pointed out that, in some cases, four years may not be a sufficient 
time for a student to complete his or her academic program at a 
college. In addition, commenters expressed concern that revising the 
policies and procedures used in recruiting minority students and in 
providing student financial assistance would require time to develop 
and implement. The revisions that have been made to the final policy 
guidance should result in far fewer instances in which colleges will be 
required to change their financial aid programs. However, the 
Department recognizes that colleges may need to conduct extensive 
reviews of their current programs and that in some cases adjustments to 
those programs may be necessary. As a result, the Department is 
expanding the proposed transition period.
    The Department is providing colleges a reasonable period of time to 
review and, if necessary, adjust their financial aid programs in an 
orderly manner that causes the least possible disruption to their 
students. Colleges must adjust their financial aid programs to be 
consistent with the principles previously set out no later than two 
years after the effective date of the Department's policy guidance. 
However, colleges may continue to provide financial aid awarded on the 
basis of race or national origin to students who had either applied for 
or received that assistance prior to the effective date of this 
guidance during the full course of those students' academic program at 
the college, even though, in many cases, this will extend beyond the 
two-year period and, in some cases, the four-year period identified in 
the proposed policy.
    Although some commenters questioned the Department's authority to 
create a transition period, such a period for adjustments is consistent 
with the Department's approach in the past under other civil rights 
statutes it enforces. See 34 CFR 106.41(d) (transition period to permit 
recipients to bring their athletic programs into compliance with Title 
IX of the Education Amendments of 1972); 34 CFR 104.22(e) (transition 
period to permit recipients to make facilities accessible to 
individuals with disabilities, as required by Section 504 of the 
Rehabilitation Act of 1973). It is based on the Department's 
recognition of the practical difficulties that some colleges may face 
in making changes to their recruitment and financial aid award 
processes.
    The transition period also is consistent with the Department's 
policy, in approving plans for the desegregation of State systems of 
higher education, that students who have been the beneficiaries of past 
discriminatory conduct not be required to bear the burden of corrective 
action. For example, while the Department requires State higher 
education systems to take remedial action to increase the enrollment of 
previously excluded students, it does not require the expulsion of any 
student in order to permit admission of those previously excluded. See 
Wygant v. Jackson Board of Education, 476 U.S. at 282-85.
    Finally, the transition period is consistent with the Department's 
obligations under Title VI to seek voluntary compliance by recipients 
that have been found in violation of the statute. 42 U.S.C. 2000d-1. 
During the transition period, the Department will provide colleges with 
technical assistance to help them make any necessary changes to their 
financial aid programs in order to achieve compliance with Title VI.

    Program Authority: 42 U.S.C. 2000d.

    Dated: February 17, 1994.
Richard W. Riley,
Secretary of Education.
[FR Doc. 94-4010 Filed 2-22-94; 8:45 am]
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