US Department of Education launches probe into University of Michigan's DACA scholarship: Is it unfair to American citizens?
The inquiry is one of five such investigations opened this month into university-based aid programs that offer financial support only to recipients of Deferred Action for Childhood Arrivals (DACA).
The investigation seeks to determine whether these scholarships violate Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, colour, or national origin in any program receiving federal funding.
What is the Dreamer Scholarship?
The Dreamer Scholarship, administered by the University of Michigan's Office of Academic Multicultural Initiatives, provides financial assistance exclusively to students protected under the DACA program. DACA, enacted in 2012 via executive order, allows certain undocumented immigrants who were brought to the United States as children to obtain work permits, defer deportation, and pursue higher education.
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Unlike citizens and permanent residents, DACA recipients are ineligible for federal financial aid such as Pell Grants, federal student loans, or work-study. To bridge this gap, some universities and private donors created targeted scholarship programs like the Dreamer Scholarship to help undocumented students cover tuition costs.
The complaint: Exclusion by citizenship
The current probe stems from complaints filed by the Equal Protection Project of the Legal Insurrection Foundation, a conservative legal advocacy group.
The organisation argues that by restricting eligibility to DACA recipients, the University of Michigan is discriminating against US-born students, who are barred from applying solely due to their citizenship status.
The Department of Education, now operating under President Donald Trump's administration, has acted swiftly on the complaint. OCR's investigation will assess whether a scholarship administered by a federally funded institution can legally prioritise non-citizens over citizens without violating Title VI's ban on national origin-based discrimination.
What does Title VI prohibit?
At the heart of the investigation is the interpretation of Title VI of the Civil Rights Act, a landmark federal law that was originally designed to combat racial segregation and discrimination in federally funded programs. Over time, the law has been applied to issues involving national origin, particularly in public education.
Federal officials are now asking whether scholarships that explicitly or implicitly exclude US citizens based on immigration or citizenship status, even when targeting historically disadvantaged groups, run afoul of this law.
The issue is further complicated by the fact that immigration status is not explicitly listed in Title VI, but national origin is.
A Trump-era shift in education policy
This investigation reflects the broader ideological direction of the Trump administration's education agenda, which places strong emphasis on prioritising US citizens in publicly funded programs. Since taking office in January 2025, President Trump has vowed to scrutinise identity-based programs that, in the administration's view, may marginalise citizens in favour of non-citizens or targeted identity groups.
This push comes on the heels of the 2023 Supreme Court ruling that struck down race-conscious college admissions policies. Since that decision, race-based scholarships and diversity initiatives have increasingly come under legal fire, and DACA-focused aid appears to be the next target.
What happens if the scholarship is found unlawful?
Should the Department of Education determine that the Dreamer Scholarship violates Title VI, the University of Michigan could face significant consequences. These may include:
Mandatory changes to the scholarship's eligibility requirements
Loss of access to certain federal funds or grants
Increased legal vulnerability to similar civil rights complaints in the future
The decision could also have a ripple effect across higher education, prompting universities nationwide to re-evaluate scholarship programs that focus on undocumented or DACA-protected students.
What this means for students and universities
This case sets up a complex and high-stakes debate about how universities can balance inclusive financial aid policies with federal non-discrimination requirements. It also challenges institutions to reassess how far they can go in supporting undocumented students without running into legal or political resistance.
For undocumented students, the investigation adds a new layer of uncertainty. For citizen students who feel excluded from identity-based aid programs, it may represent a shift in their favour. And for universities, it signals that the federal government is watching closely, and may soon demand major changes in how scholarships are awarded.
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