Scholarships targeting women, racial minorities, and other underrepresented groups are becoming less common amid a wave of legal challenges and federal government pressure. According to data from the National Scholarship Providers Association (NSPA), the proportion of scholarships with eligibility criteria based on race, ethnicity, gender, or similar demographic factors has declined to 11 percent in 2026, down from 15 percent in 2023 following a Supreme Court ruling that prohibited colleges from considering race in admissions decisions.

While scholarship programs themselves are not disappearing, many organizations are revising eligibility criteria to be more inclusive of all races and genders, instead focusing on other factors such as economic need or first-generation college status. “We are seeing a shift,” said Jackie Bright, NSPA president. This change reflects growing caution among scholarship providers as legal scrutiny intensifies.

Several conservative advocacy groups have actively challenged race and gender-based scholarships, arguing these practices constitute forms of illegal discrimination. Edward Blum, founder of the American Alliance for Equal Rights, which initiated lawsuits contributing to the 2023 Supreme Court ruling and has filed multiple complaints against race-based scholarships, said that race and ethnicity should not factor into public policies. His organization has been instrumental in prompting changes in scholarship eligibility, including efforts to end race-based awards at private foundations and universities.

The Trump administration also took a strong stance against race and gender preferences in scholarships. In February 2025, the Education Department issued guidance directing institutions to cease using racial preferences and stereotypes in awarding scholarships. While portions of that guidance were successfully challenged in court, the administration continued efforts to curb such practices. Several organizations, including the American Bar Association, McDonald’s, and the San Diego Foundation’s Black Alumni Scholarship Fund, have revised their scholarship criteria or discontinued race-based eligibility after legal challenges.

Opponents of these restrictions argue that scholarships aimed at promoting diversity remain critical to addressing historical discrimination and inequality in higher education access. Danielle R. Holley, president of Mount Holyoke College and a legal scholar, emphasized that such scholarships respond to longstanding exclusion, noting that many selective institutions historically denied admission to women and Black students. She also highlighted ongoing disparities, such as alumni preferences that tend to favor predominantly White descendants and higher rates of financial need among Black, Hispanic, and Native American students supported by Pell Grants.

Women have earned more college degrees than men overall but continue to face challenges in certain high-paying fields and often bear a greater burden in repaying student debt, partly due to persistent wage gaps. However, legal experts say the complex interplay of civil rights regulations complicates the issue. Title IX prohibits sex discrimination at federally funded educational institutions, while Section 1981 of the Civil Rights Act of 1866 bars racial discrimination in contracts, which has been invoked in lawsuits against nonprofits and private scholarship providers.

Legal counsel warns that revising scholarship criteria in response to legal pressure is often a lengthy process and poses challenges. Nonprofits must respect donor restrictions on scholarship funds, and attempts to create new eligibility requirements that function as proxies for race or ethnicity, such as limiting awards to students at historically Black colleges, may invite further legal challenges. An Iowa Supreme Court ruling in June underscored these difficulties by blocking the University of Iowa from reassigning a private donation designated for Black students to benefit first-generation students without sufficient donor approval.

There is also concern that legal restrictions on diversity scholarships could inadvertently harm women’s colleges, which rely heavily on gender-specific funding. Holley expressed apprehension that if scholarships for women are prohibited, donations to women’s colleges such as Mount Holyoke—which serve exclusively female students—may come under renewed scrutiny.

As organizations navigate this evolving legal landscape, many are balancing compliance with maintaining efforts to support historically marginalized students. The scholarship community faces an uncertain future as it attempts to reconcile anti-discrimination laws with longstanding goals of fostering opportunity and equity in higher education.