The Hispanic Scholarship Fund will open its scholarship program to students of all races and ethnicities beginning in January, ending its previous rule that limited awards to applicants of Hispanic heritage.
The change is part of a settlement agreement in a lawsuit that accused the nonprofit of discriminating against students who did not identify as Hispanic.
The organization announced the change on Nov. 9. Under the new rules, applicants will not be judged based on their race or ethnicity. Instead, the fund will consider whether students “demonstrate a commitment” to the success of Hispanic Americans in the United States.
The decision settles a lawsuit filed by the American Alliance for Equal Rights, a group that challenges programs using race-based rules.
The organization argued that the Hispanic Scholarship Fund unfairly blocked students of other backgrounds from receiving financial support, even if they met other scholarship requirements.
The change will allow white, Asian and other non-Hispanic students to apply for awards, provided they meet the program’s updated standards. Hispanic students will also remain eligible. The new approach shifts the focus from an applicant’s background to their support for the Hispanic community.
Fidel Vargas, president and chief executive of the Hispanic Scholarship Fund, said the organization had considered changing its eligibility rules since 2023, when the U.S. Supreme Court ended the use of race as a factor in college admissions.
According to Quartz, Vargas said the new policy could bring more people into efforts to support Hispanic Americans. He explained that the organization wants support from people across different communities.
“We’re interested in making our world a better place and making our country stronger and strengthening the Hispanic community,” Vargas said.
“That requires everyone, not just Hispanics, to be aligned on what we’re doing,” he added.
The Hispanic Scholarship Fund provides financial support and mentorship to Hispanic American students pursuing higher education. Its awards generally range from $500 to $5,000, helping students pay for college costs while also connecting them with guidance and support.
The lawsuit was filed in federal court in Washington, D.C., in December 2025, according to the information provided by the organization and reports about the case.
The American Alliance for Equal Rights brought the case on behalf of two students, one white and one Asian, who said they met many of the scholarship requirements but could not apply because they were not of Hispanic heritage.
A federal judge ruled in September that some claims against the fund were invalid and that other parts of the dispute were better handled by state courts. After that ruling, the nonprofit agreed to change its program and settle the case.
The settlement comes during a wider debate over race-based scholarships, college admissions and diversity programs in the United States. The Supreme Court’s 2023 decision on affirmative action and the Trump administration’s efforts to challenge diversity initiatives have put greater attention on how schools and nonprofit groups set eligibility rules.
Scholarship Fund Revises Eligibility After Lawsuit
For years, the Hispanic Scholarship Fund reserved its awards for students who identified as having Hispanic heritage. That policy was central to the organization’s mission of helping Hispanic Americans gain access to college and complete their education.
The new policy will keep the fund’s focus on the Hispanic community but remove race and ethnicity as conditions for applying.
Rather than asking whether a student is Hispanic, the organization will look for applicants who show a commitment to helping Hispanic Americans succeed. This could allow students from different backgrounds to take part in the program while continuing to support the nonprofit’s goals.
The settlement does not mean the organization is ending its work with Hispanic students. Instead, it changes who can seek financial aid and how applicants will be considered.
The fund has not provided further details in the information available about how it will measure an applicant’s commitment to Hispanic success. That question will be important as the organization prepares to put the new rules into effect in January.
The scholarship awards range from $500 to $5,000. While the amounts may not cover all college expenses, they can help students pay for books, supplies, tuition and other costs linked to higher education, NY Times reported.
The organization also offers mentorship opportunities, giving students access to guidance as they work toward their academic and career goals.
The broader mission of the fund is to improve educational opportunities for Hispanic Americans. Under the revised rules, the organization intends to continue that work while allowing people from other racial and ethnic groups to participate.
Vargas said the goal is to build wider support for the Hispanic community. His comments suggest that the organization sees the change as a way to involve more people in its work rather than move away from its mission.
The settlement also avoids the need for the nonprofit to continue fighting the lawsuit over its former eligibility requirements. However, the agreement does not establish that the organization intentionally discriminated against applicants. It resolves the legal dispute through a change in the scholarship program.
Lawsuit Challenges Scholarship Restrictions
The American Alliance for Equal Rights filed the lawsuit after arguing that the Hispanic Scholarship Fund’s former rules treated applicants differently because of their race or ethnicity.
The alliance represented two students who said they were qualified in other ways but could not apply because they did not have Hispanic heritage. One student was white, while the other was Asian.
The lawsuit claimed that the scholarship rules violated the Civil Rights Act and other laws. It argued that the nonprofit should not be allowed to restrict access to financial awards based on an applicant’s ethnic background.
The alliance is part of a larger effort to challenge programs that use race or ethnicity to decide who can receive scholarships, educational opportunities and other benefits.
The group was founded by Edward Blum, who also established the organization behind the legal challenge that led to the Supreme Court’s 2023 decision against race-based college admissions.
That ruling changed how colleges and universities across the country could consider race when reviewing applicants. It did not directly decide every question involving private scholarships, but it became a major part of the debate over programs designed to support students from specific racial or ethnic groups.
The Hispanic Scholarship Fund had considered changing its program after the court decision, according to Vargas. However, the organization initially chose not to make changes in response to pressure from the alliance and other conservative groups.
Edward Williams, an attorney who represented the fund, said the organization did not want to change its rules simply because outside groups demanded it.
“They really wanted to vindicate an organization’s right to give out these types of scholarships,” Williams said.
His comments show that the nonprofit initially wanted to defend its ability to operate a scholarship program focused on Hispanic students. The organization later agreed to a settlement after the federal judge’s September decision narrowed the claims that could continue in that court.
The legal dispute highlights the questions nonprofit groups face when they create programs for students from specific communities. Organizations may seek to address gaps in education and financial support, but their eligibility rules can also face legal challenges when they use race or ethnicity as a requirement.
For the Hispanic Scholarship Fund, the settlement creates a new path: it can continue supporting Hispanic Americans while allowing applicants of all backgrounds to compete for awards.
Ruling Puts Pressure on Scholarship Programs
The settlement comes more than three years after the Supreme Court’s decision to end race-based college admissions policies at colleges and universities.
The 2023 ruling affected how schools could use race when deciding which students to admit. Since then, colleges have faced closer attention to their admissions practices, scholarship programs and efforts to improve campus diversity.
Some universities have reported changes in the racial makeup of their incoming classes. Data from Harvard, for example, showed that the share of incoming Black students fell by nearly half after the Supreme Court decision, according to reports cited in the information about the case.
The share of incoming Hispanic or Latino students at Harvard also declined. Hispanic or Latino students made up 16 percent of incoming freshmen two years earlier, compared with about 11 percent in the latest figures provided.
Other selective colleges have reported similar changes, although the results have not been the same at every school. Princeton University and Amherst College, for example, saw slightly more Black students enroll in their incoming classes this year, based on their reported data.
These figures show that the effects of the Supreme Court ruling have varied across institutions. They also form part of a larger discussion about how colleges can maintain access for students from different backgrounds without using race as a factor in admissions decisions.
The Trump administration has also pushed to end diversity programs at universities, private companies and federal agencies. Its actions have added to legal and political pressure on organizations that use race-based policies.
The Hispanic Scholarship Fund’s settlement is part of this changing environment. Although the nonprofit had been considering a policy change since 2023, the lawsuit brought the issue directly into court and led to a formal agreement.
For non-Hispanic students, the change removes the heritage requirement that previously prevented them from applying. For Hispanic students, the program will remain available, although the organization will use its revised eligibility standards.
The fund’s decision also shows how scholarship programs may change in response to legal challenges over race-based eligibility rules.
The settlement does not change the financial value of the awards described by the organization. Students can still seek scholarships ranging from $500 to $5,000, along with mentorship support.
