In recent years U.S. higher education institutions have allocated billions of dollars annually to staffing, programming, and compliance efforts related to Diversity, Equity and Inclusion (DEI) initiatives.
These investments span across federally funded research grants, state-level appropriations, tuition-supported mandates, and private sector partnerships. While proponents argue that DEI enhances campus climate, student success, and institutional inclusivity, critics question its fiscal sustainability and measurable impact.
Under the current Trump Administration, the federal government is using a combination of executive orders and funding leverage to force institutions to shut down DEI.
In this article we analyze DEI spending across different types of institutions classified under the Carnegie system. We examine how resources are allocated, whether they yield tangible benefits, and the financial and political pressures shaping their future. Our assessment underscores the need for institutions to justify their DEI commitments with clear, data-driven outcomes that align with student success and institutional priorities.
The Impact of DEI Spending: Measurable Outcomes vs. Costs
Quantifying Success: Student Outcomes and Institutional Gains
Despite significant financial commitments, the tangible benefits of DEI initiatives remain debated. Research suggests that some DEI investments correlate with improvements in retention and student satisfaction, particularly among historically underrepresented groups. For instance:
- Retention Rates: Institutions with robust DEI programs report a 6–10% higher retention rate for first-generation and minority students compared to non-DEI-focused schools.
- Faculty Diversity: Institutions investing in DEI recruitment strategies have increased BIPOC faculty representation by 3.1% on average over five years—a modest but notable improvement.
- Campus Climate: A 2023 survey from the Higher Education Research Institute found that 62% of students at DEI-intensive universities reported feeling more included and supported, versus 48% at institutions with minimal DEI programming.
Challenges and Inefficiencies
Conversely, multiple studies and audits raise concerns about the efficiency and necessity of DEI expenditures:
- Administrative Bloat: DEI staffing growth has outpaced faculty hiring, leading to administrative overhead that critics argue does not directly benefit students. At institutions like UMich, DEI salaries exceed $30 million annually, surpassing some academic department budgets.
- Tuition Increases: A 12% rise in tuition costs (2010–2022) has been linked, in part, to expanded DEI bureaucracies. The Heritage Foundation found that universities allocating over $5 million annually to DEI saw tuition hikes outpace inflation-adjusted funding gaps.
- Academic Outcomes: Despite these investments, Black and Hispanic student graduation rates have stagnated at low single-digit growth over the past decade, suggesting that DEI spending alone does not significantly bridge achievement gaps.
While some institutions have demonstrated modest progress in diversity recruitment and student experience metrics, the broader impact of DEI initiatives remains inconclusive. As universities face growing scrutiny and financial constraints, the challenge lies in aligning DEI efforts with measurable, mission-critical outcomes.
DEI Spending in R1/R2 Doctoral Universities
Staffing and Compensation
R1 institutions lead DEI investment, averaging $8.5M annually (0.62% of total expenditures). The University of Michigan (UMich) employs 241 DEI staff at an annual cost of $30.68M, while Ohio State University (OSU) increased its DEI workforce from 88 employees at $7.3M (2018) to 189 employees at $20.38M (2023). DEI executive salaries frequently exceed faculty earnings, with OSU’s DEI head James L. Moore earning $300,000 and UMich's former Chief Diversity Officer Robert Sellers earning $431,000.
Programmatic and Research Expenditures
- Mandatory DEI curriculum: Estimated at $1.8B nationally over four years, requiring millions of student hours.
- Supplier diversity initiatives: UMass allocated 20% of IT spending to minority-owned vendors, securing $1.9M in contracts.
- Federal DEI funding: NSF allocated $2B for DEI-aligned STEM research, benefiting R1 institutions.
Political and Financial Challenges
Federal funding cuts loom as DOJ directives mandate eliminating DEI offices in federally funded institutions. Texas A&M has already cut DEI staffing by 86%, reallocating $11M to merit-based scholarships. This raises questions about the sustainability of these expenditures.
DEI Spending in Master’s Institutions (M1-M3)
Budget and Staffing Models
Master’s institutions allocate $2.1M annually to DEI (0.51% of expenditures). Unlike R1 universities, these institutions consolidate DEI within HR departments:
- Boise State University employs 18 DEI-focused HR staff, including a $145,000 Chief Diversity Officer.
- Montclair State University consolidates DEI and recruitment under HR, saving $480,000 annually.
Programmatic Investments
- Campus climate surveys: Costs range from $120K to $500K, with some institutions leveraging consortium pricing.
- Implicit bias training: Digital training costs average $24.99 per participant, totaling $37,485 for 1,500 employees.
- First-gen student retention programs: Midwestern State University allocates $620,000 annually, improving retention by 14%.
Strategic Funding Constraints
With 42% lower federal grant funding per capita than R1s, master’s institutions rely on tuition-based DEI revenue streams:
- University of Dayton’s online DEI HR concentration generates $1.2M annually.
- San José State University’s DEI certificates contribute $580K per year.
DEI Spending in Baccalaureate Colleges
Baccalaureate colleges allocate $780K annually (0.47% of expenditures) to DEI. These institutions prioritize cost-efficiency through consolidated staffing models and curricular mandates.
- Staffing: Typically employ 5–10 DEI staff, often dual-hatted with Title IX compliance.
- Curriculum: Institutions like Chapman University require students to complete Diversity (DV) courses.
- Cultural Competency Training: Western Michigan University runs a 30-hour DEI curriculum for faculty at $2,500 annual licenses.
DEI Spending in Associate’s Colleges
Associate’s colleges allocate $310K annually (0.43% of expenditures) to DEI, focusing on cost-effective strategies:
- Staffing: Minimal FTEs, often adjuncts handling DEI responsibilities.
- Curriculum: Miami Dade College integrates DEI modules into workforce training programs.
- Funding Challenges: Community colleges in conservative states face DEI defunding measures.
The Future of DEI Spending
With the return of a Trump administration committed to gutting DEI spending, federal policy is poised to exert significant downward pressure on DEI initiatives nationwide. Executive orders and legislative measures will likely restrict DEI-related funding streams, requiring institutions to either eliminate or creatively restructure these efforts to maintain compliance and access to federal dollars.
Reallocation vs. Elimination
While some institutions, particularly in conservative states, may eliminate DEI offices entirely, others will seek to rebrand or embed DEI functions under alternative headings such as:
- Student Success and Retention Programs – repackaging DEI efforts as first-generation and minority student support.
- Workforce Development and Compliance – shifting DEI hiring and supplier diversity initiatives under broader HR and compliance departments.
- Institutional Climate and Leadership Development – framing equity-related initiatives as professional development, rather than explicit diversity programs.
Outlook
While federal mandates can curtail direct DEI spending, entrenched institutional priorities, state-level policies, and private funding sources may allow universities to sustain key initiatives under different frameworks. Moving forward, institutions will have to balance political realities with institutional values, navigating a landscape where DEI efforts must increasingly prove their worth through measurable student success outcomes rather than ideological commitments.
Ultimately, whether DEI expenditures are significantly reduced or simply rebranded will depend on institutional leadership, state politics, and financial dependencies on federal funding.
