UNITED STATES DEPARTMENT OF EDUCATION OFFICE OF THE GENERAL COUNSEL September 7, 1995

Dear College and University Counsel:

I am writing to confirm that the Department of Education's policy guidance on race-targeted student financial aid has not changed as a result of either the Supreme Court's recent decision not to hear the appeal requested by the University of Maryland in the Podberesky v. Kirwan  case [38 F.3d 147 (4th Cir. 1994), cert. den., 115 S. Ct. 2001 (1995)] or the Supreme Court's decision in Adarand Constructors v Pena [115 S. Ct. 2097 (1995)]. A copy of our policy guidance is enclosed.

Podberesky Case

In Podberesky,  by denying the University's request, the Supreme Court neither ruled against race-targeted scholarships generally, nor affirmed the Fourth Circuit's decision that the University had not submitted sufficient evidence to justify providing such aid. The Supreme Court simply decided not to hear the appeal.

It is important for you to know--especially in light of some erroneous news reports--that the Fourth Circuit did not rule that all race-targeted scholarships are impermissible. The Fourth Circuit followed established Supreme Court precedent, as does Principle 3 of the Department's policy, by holding that colleges may establish race-targeted scholarships to remedy the present effects of prior discrimination, provided that such measures are narrowly tailored. to achieve that objective. The Fourth Circuit did rule--contrary to the arguments made on behalf of the University by the United States Government in an amicus brief in the case--that it is not permissible for a college to rely on a poor reputation in the minority community to show that the effects of prior discrimination are continuing. Similarly, a racially hostile environment was held not to be a present effect of a college's past discrimination unless the college shows that this environment was caused by its own past actions and is not the result of general societal discrimination. The Fourth Circuit also ruled that the University's scholarship program was not "narrowly tailored" to cure the present effects of the University's previous discrimination. It found that the University had not convincingly established the composition of its applicant pool and, therefore, the court could not determine whether there was an under representation of African-American students or any need for narrowly tailored remedial action. The court also concluded that, even if there existed a need for remedial action, the scholarship program was not narrowly tailored because its eligibility criteria included students who, in the court's view, were not the type of students subjected to the University's past discrimination.

In short, the Fourth Circuit's decision was limited to ruling on the nature and weight of the University's factual evidence and the extent to which it met the "narrowly tailored remedy" legal standard established by the Supreme Court in numerous precedents. While we disagree with the result in Podberesky, the decision does not require the Department to modify its policy guidance on remedial race-targeted scholarships. Of course, in applying that guidance, we will follow the evidentiary standards articulated by the Fourth Circuit in Podberesky  in states that are subject to the ruling--Maryland, Virginia, West Virginia, North Carolina, and South Carolina.

Finally, the Fourth Circuit's decision in Podberesky did not address the validity of race-targeted scholarships that are consistent with Principle 4 of the Department's policy guidance, which states that a college may consider race as a factor or a condition of eligibility in awarding scholarships in order to promote the racial diversity of its student body, as long as such action complies with the narrow tailoring requirement set forth in Principle 4.

Adarand Case

In the Adarand  case, where a federal affirmative action program for the construction industry was challenged, the Supreme Court held that racial classifications established by Congress must be analyzed by a reviewing court under the same strict scrutiny standard that applies to racial classifications established by state or local governments. Such classifications must be narrowly tailored to serve a compelling governmental interest. The Department's policy under Principle 2 states that race-targeted financial aid authorized by Congress would not violate Title VI of the Civil Rights Act. The Supreme Court's decision in Adarand  did not change this principle, but it did rule that a strict scrutiny standard must be used by the Federal courts in reviewing any constitutional challenges to Congressionally authorized race-based programs.

The Department of Justice is coordinating a review of federal programs under the strict scrutiny standards made applicable by Adarand.  If it is determined that a particular race-targeted financial aid program authorized by Congress does not meet these standards, action will be taken to make appropriate changes in that program. I want to stress, in any event, that Adarand  reaffirmed that remedying the effects of past discrimination is a compelling governmental interest that can justify the use of narrowly tailored raced-based measures. Furthermore, Adarand  does not foreclose the use of such measures to promote diversity in higher education under Principle 4 of the Department's policy guidance.

Summary

In conclusion, under governing legal standards, race-targeted student aid is legal in appropriate circumstances as a remedy for past discrimination or as a tool to achieve a diverse student body. Scholarships for these purposes are vital to the education of all students.

The Department will continue to implement its financial aid policy under Title VI of the Civil Rights Act and to support race-targeted aid programs that are consistent with our policy. The Department's Office for Civil Rights is continuing to provide technical assistance to institutions in their efforts to develop financial aid programs that comply with the policy and with applicable federal court decisions.

Sincerely,

Judith A. Winston