Background
Wisconsin’s Minority Undergraduate Retention Grant Program, established by Wis. Stat. § 39.44, provided taxpayer-funded financial grants of up to $2,500 per academic year to undergraduate students attending Wisconsin private nonprofit colleges or technical colleges, but only to students who are Black American, American Indian, Hispanic, or former citizens (or descendants of citizens) of Laos, Vietnam, or Cambodia admitted to the United States after December 31, 1975. Students of other racial, national origin, or ancestry groups were categorically ineligible. The program was administered by the Higher Educational Aids Board (HEAB) and justified originally as a means of fostering diversity by retaining minority students who left higher education at disproportionately high rates.
Five Wisconsin taxpayers filed a declaratory action in Jefferson County Circuit Court seeking to enjoin HEAB from administering the program, arguing it violated the Equal Protection Clause of the Fourteenth Amendment. The circuit court upheld the program under Grutter v. Bollinger, finding a compelling interest in student body diversity and that the program was narrowly tailored. While the Taxpayers’ appeal was pending, the U.S. Supreme Court decided Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, 600 U.S. 181 (2023) (SFFA), which struck down race-based admissions programs at Harvard and UNC. Applying SFFA, the Wisconsin Court of Appeals reversed the circuit court and enjoined HEAB from administering the Grant Program. HEAB petitioned for review.
Before the Wisconsin Supreme Court, HEAB raised two arguments: that the Taxpayers lacked standing because they suffered no particularized pecuniary injury, and that the Grant Program served a compelling governmental interest in equalizing educational opportunities and reducing disproportionate attrition rates among certain minority groups—an interest it contended survived SFFA.
The Court’s Holding
Writing for a majority, Justice Ziegler held that the Taxpayers had standing under Wisconsin’s taxpayer-standing doctrine, which permits Wisconsin taxpayers to challenge illegal expenditures of public funds without showing that any favorable ruling would reduce their individual tax burden. Because the Taxpayers alleged that HEAB was expending public funds pursuant to an unconstitutional statute, the allegation of a pecuniary loss to taxpayers as a class was sufficient. All seven justices joined this portion of the opinion.
On the merits, the court held that Wis. Stat. § 39.44 violates the Equal Protection Clause of the Fourteenth Amendment and affirmed the Court of Appeals’ injunction against the program. Applying strict scrutiny, the majority found that HEAB failed to demonstrate a compelling governmental interest at either step of the analysis. HEAB’s original interest—promoting student body diversity—was foreclosed by SFFA, which held that diversity is no longer a sufficiently coherent or compelling interest to justify racial classifications in education. Moreover, HEAB had not identified specific educational objectives flowing from diversity at private and technical colleges; it argued diversity was a compelling interest in itself, a position unsupported by current law.
The court also found that HEAB’s post-SFFA reformulated interest—equalizing educational opportunities by remedying disproportionate attrition rates among certain racial groups—was not shown to have been a compelling interest at the time the statute was enacted, nor did HEAB demonstrate that the program was narrowly tailored to that end. Because the program failed strict scrutiny’s first prong, the court affirmed that HEAB is permanently enjoined from operating the Grant Program.
Key Takeaways
- Wisconsin taxpayers have standing to challenge race-based government expenditures under state taxpayer-standing doctrine without showing a reduction in their individual tax burden; the allegation of an unconstitutional expenditure of public funds suffices.
- Post-SFFA, “diversity in higher education” is no longer a cognizable compelling interest sufficient to survive strict scrutiny, and a state cannot save a race-based financial aid program merely by recharacterizing its goal as reducing minority attrition or equalizing graduation rates without empirical and historical support.
- Wis. Stat. § 39.44’s categorical exclusion of students outside specified racial, national origin, ancestry, and alienage groups from grant eligibility is unconstitutional, and HEAB is permanently enjoined from administering the Minority Undergraduate Retention Grant Program.
- The decision is unanimous on standing (7-0) and majority-held on the Equal Protection merits (4-3 majority, with three justices concurring separately), reflecting ongoing judicial debate about the precise scope of permissible race-conscious state action after SFFA.
Why It Matters
This decision is one of the first state supreme court rulings to apply SFFA to strike down a race-based financial aid program—as distinct from admissions—at the postsecondary level. It signals that SFFA’s reasoning extends beyond holistic admissions processes to categorical grant eligibility criteria that condition public funds on an applicant’s race, national origin, or ancestry. States and institutions operating similar minority retention or scholarship programs must now reassess their constitutionality under strict scrutiny without the shield of the diversity rationale.
The ruling also clarifies Wisconsin’s taxpayer-standing doctrine in the constitutional-rights context, confirming that individual taxpayers need not quantify their personal share of an allegedly unlawful expenditure to maintain suit. Together, these holdings lower the procedural barrier for future equal-protection challenges to race-conscious state spending programs and raise the substantive bar for governments seeking to justify such programs, potentially reshaping how Wisconsin and other states structure financial assistance in higher education.