How would an HSI guarantee program incentivize more HSIs to seek Title V designation and receive competitive funds?

By Deborah Santiago and Cassandra Arroyo

Overview

A guaranteed non-competitive grant program for Hispanic-Serving Institutions (HSIs) would accomplish five key goals. It would:

1. Serve as a mechanism for incentivizing HSIs to apply for Title V designation and thus qualify for various federal funding sources (e.g., CARES Act, Higher Education Emergency Relief Fund (HEERF), American Families Plan (AFP)).
2. Provide an equitable mechanism for underserved Title V eligible institutions to compete for federal funding in order to build institutional capacity.
3. Strengthen the original purpose of the Title V program by providing funding that allows HSIs to specifically dedicate time to planning and strategizing around efforts to intentionally serve Latino students.
4. Build on the program element of planning grants as there is past precedent for such programs and there would be no need for congressional involvement to implement such a program.
5. Create a level playing field for two-year institutions to compete for federal funding.

In a previous post, Excelencia posited that creating a new non-competitive grant program could build institutional capacity at HSIs to better support the Latino students these institutions enroll, and we provided three options for implementing such a program. Although Title V grants represent a small proportion of an HSI’s budget, it provides significant support for capacity building, especially for community colleges. This brief offers the following:

1. Distinguishes between HSIs and HSIs with Title V designation in terms of which of these institutions would qualify for an HSI guarantee,
2. Provides an aggregate landscape of the number of HSIs, Title V eligible institutions, and Title V allocations in fiscal year 2019 (FY 2019),
3. Analyzes HSIs and Title V designated eligible institutions by institution type and control to understand the potential impact of an HSI guarantee program across different institutions, and,
4. Considers the potential implications of an HSI guarantee for building institutional capacity, especially for under-resourced institutions disproportionately enrolling Latino and other students of color.

Background

The numbers of HSIs continues to grow, and federal funding levels are not keeping pace. In 2019–20, HSIs enrolled over 60% of Latino undergraduates yet represented less than 20% of all higher education institutions. As such, HSIs are an important postsecondary facilitator for Latino students’ success. Over the past 25 years, the number of HSIs has nearly tripled (1994–95 to 2018–19) with the most growth occurring in the past decade (93% increase by 2018–19). Since 1995, the federal government has allocated funds to increase capacity building for institutions serving Latino students through the Title V, Developing HSI program. However, Title V funding has not increased at a high enough rate to match the growth in new HSIs resulting in over half (60%) of Title V designated eligible HSIs not receiving funding. The increased competitiveness in the Title V program could be mitigated by implementing an HSI guarantee program that creates opportunities for under-resourced HSIs that have not received a grant to plan and prepare competitive Title V application submissions.

Which HSIs would be eligible for an HSI guarantee?

Not all institutions that meet the definition of an HSI¹ would qualify for an HSI guarantee under the assumptions presented in our last Medium post, only those that have formally received Title V designation through the Department of Education’s application process would qualify. There are four criteria that must be met for an institution to be considered an HSI and an additional four steps for an institution to be eligible to apply for Title V funding.

In FY 2019, how many HSIs were designated Title V eligible and how many received Title V funding?

In FY 2019, there were 539 HSIs, 423 of which were also Title V designated eligible (78%). Despite a majority of HSIs being Title V designated eligible and able to apply for Title V funding, just 53% received Title V funding in the 2019 fiscal year (223) in the form of a non-competitive continuing grant² or a new Title V grant. Moreover, approximately 80% of the allocated $124.4 million dollars were provided to non-competitive continuing grant recipients (180) compared to new grantees (43) despite there being over four times as many grant applications (223) as there were new grantees. Altogether, the vast majority of HSIs are not receiving capacity-building revenue through this program. Due to its increasingly competitive nature as more institutions become HSIs, in 2019 less than half (41%) of all HSIs received Title V funding.

How would an HSI guarantee impact institutions differently by type?

As previously mentioned, one of the core goals of an HSI guarantee is to build institutional capacity. However, capacity differs by institution type. Most four-year research institutions have greater institutional capacity (e.g. financial resources and staff capacity) to use in writing competitive proposals compared to smaller liberal arts colleges and two-year institutions. In terms of Title V funding, four-year HSI institutions are receiving Title V designated eligibility, and thus qualifying for an HSI guarantee, at a higher rate compared to two-year institutions (98% relative to 78%) (Table 3).

As such, relative to two-year institutions, an HSI guarantee program that focuses solely on HSIs that are also Title V designated eligible would have a greater immediate impact on four-year institutions which already tend to have more financial support. Moreover, since more four-year institutions are Title V designated eligible, they also have a greater chance than two-year institutions of applying for and receiving Title V competitive funding despite two-year institutions receiving more Title V new grants in fiscal year 2019. However, in our previous post, we argue that an HSI guarantee could also incentivize institutions that are not yet Title V designated eligible to apply for eligibility which would (1) incentivize more two-year institutions to apply and receive the proposed HSI guaranteed funding (29%) in addition to other federal funds (e.g., CARES Act, HEERF), and, (2) provide a pathway for more two-year institutions to apply for Title V competitive funding. Altogether, a non-competitive grant program that provides guaranteed annual financial support creates a more equitable playing field for two-year institutions to leverage the funding as a planning grant to increase their competitiveness for Title V funding.

How would an HSI guarantee impact institutions differently by control?

Public and private HSI institutions are equally likely to qualify for an HSI guarantee (75% and 74%, respectively) and become Title V eligible (34% and 35%, respectively) (Table 4). While an HSI guarantee program would still provide an incentive to increase the number of both public and private HSIs that have Title V designated eligibility, there are no large disparities in Title V designation by control compared to institution type differences (four-year vs two-year). This suggests that an HSI guarantee program creates the largest potential for closing institutional capacity building gaps between four-year and two-year institutions.

Implications of an HSI Guarantee (Summary)

An HSI guarantee would create more equitable access to federal funding for under-resourced institutions by providing them the funding to invest in planning efforts to compete more effectively for Title V funding. However, an HSI guarantee does not and should not preclude the need for additional investment in HSIs. Rather, this type of non-competitive grant program utilizes the resources and structures already in place such that all eligible HSIs can receive funding to increase their capacity building efforts. In addition, since Congress is increasingly using official designation statuses to allocate federal funding to Minority Serving Institutions (MSIs), incentivizing HSIs to apply for Title V designation would make more institutions eligible for both an HSI guarantee as well as federal funding sources (e.g., CARES, HEERF, American Families Plan). Moreover, an HSI guarantee would enable two-year institutions (less financially resourced compared to four-year institutions) to become more competitive for Title V funds to more intentionally serve their students. Altogether, an HSI guarantee would both mitigate the inequitable distribution of federal funding, but it would also demonstrate the federal government’s investment in Latino student success and the institutions that enroll them with an opportunity to better serve them.

[1]. A Hispanic-Serving Institution (HSI) is defined as an accredited, degree-granting public or private nonprofit institution of higher education that has an undergraduate full-time equivalent enrollment that is at least 25 percent Hispanic at the end of the award year immediately preceding the date of application. Source: U.S. Department of Education. Eligibility. https://www2.ed.gov/programs/idueshsi/definition.html#:~:text=A%20Hispanic%2DServing%20Institution%20

[2]. The Title V program provides five year grant awards. Institutions that are receiving Title V funding in years two or greater are considered non-competitive continuing (NCC) grant recipients.