Civil rights groups are urging federal education officials to investigate Oregon’s use of race-linked criteria in school funding, arguing that state programs for K-12 charter schools and public universities allocate public dollars in ways that violate federal anti-discrimination law.

The dispute, highlighted Tuesday by Campus Reform and based on a May 28 administrative complaint, centers on two Oregon funding systems: the Charter School Equity Grant program administered by the Oregon Department of Education and the Student Success and Completion Model used by the Higher Education Coordinating Commission to distribute state support among Oregon’s seven public universities.

Defending Education and Do No Harm filed the complaint with the U.S. Department of Education’s Office for Civil Rights, alleging that Oregon’s agencies are violating Title VI of the Civil Rights Act of 1964 and the Fourteenth Amendment’s Equal Protection Clause by using student race and ethnicity as factors in distributing public education funds. The groups are asking OCR to open a civil rights investigation and require changes if it finds violations.

The complaint does not by itself establish that Oregon has broken federal law. OCR complaints are requests for federal review, and the Education Department may dismiss, resolve or investigate allegations depending on jurisdiction, evidence and enforcement priorities. But the filing adds Oregon to a growing national list of state and campus programs being challenged after the Supreme Court’s 2023 decision limiting race-conscious admissions in higher education.

The K-12 portion of the complaint focuses on Oregon Administrative Rule 581-017-0768, which sets eligibility requirements for the Charter School Equity Grant. The official rule says a public charter school may qualify only if it is not a virtual charter school and has a student population in which at least 65 percent of total enrollment is composed of students from two combined groups: “racial or ethnic groups that have historically experienced academic disparities” and students with disabilities.

The civil rights groups argue that the rule functions as a racial threshold for access to state grant money, even though the eligibility language also includes students with disabilities. They say that schools serving too many students outside the specified demographic categories may be excluded from a funding opportunity because of student racial composition. The complaint frames that structure as an unlawful quota rather than a neutral effort to target schools with greater needs.

Oregon’s rule also directs the Department of Education to publish a list of public charter schools that meet the eligibility requirements before each application cycle. For schools that have been operating for at least one year, the department determines eligibility using the most recent finalized Spring Membership report. For first-year charter schools, the state uses the most recent finalized Fall Membership report and the December Special Education Child Count report.

The higher education portion of the challenge concerns Oregon’s Public University Support Fund, the primary state funding source for the operations of Oregon’s public universities. The Higher Education Coordinating Commission says it distributes that funding through the Student Success and Completion Model, a formula adopted in 2015 that weighs not only enrollment but also resident student graduation and other factors tied to statewide attainment goals.

On its website, HECC says the funding model includes incentives for improved graduation among targeted populations, including underrepresented student groups, and degrees earned in high-demand fields. Oregon administrative rules define “Targeted Student Populations” to include undergraduate resident students who are part of underrepresented racial or ethnic groups, low-income students, rural students and veterans. The rules define underrepresented racial or ethnic groups as resident undergraduate students identified as American Indian or Alaska Native, Hispanic, Pacific Islander, Black, African American, or two or more races if one of the listed categories is included.

That structure is central to the complaint. Defending Education and Do No Harm argue that Oregon’s higher education formula gives public universities funding incentives based on graduates’ racial or ethnic identities, not solely on economic disadvantage, first-generation status, geography, academic field or other race-neutral measures. The state, they contend, is rewarding institutions for producing degrees among some racial groups while excluding white and Asian students from the same targeted racial category.

Supporters of equity-based funding models generally argue that race and ethnicity can be relevant indicators when states are trying to close long-running educational gaps, particularly in systems where aggregate outcomes mask sharp differences in completion, retention, discipline, access to advanced coursework and college affordability. Oregon’s own public materials say the Student Success and Completion Model is designed to promote progress toward state educational attainment goals and improve outcomes for underserved populations.

The legal question is whether a state may translate those equity goals into formulas that expressly use racial categories. The complainants say the answer is no, arguing that public agencies receiving federal funds must avoid racial classifications unless they can satisfy strict constitutional scrutiny. They cite the post-affirmative-action legal environment in which race-based benefits, scholarships, fellowships, admissions practices and targeted programs have drawn closer review from federal agencies and private litigants.

Oregon’s agencies have not publicly announced a resolution to the complaint, and there was no immediate public indication Tuesday that OCR had opened a formal investigation. In a separate public-facing page about federal changes and HECC’s mission, Oregon higher education officials say institutions should continue to comply with federal civil rights law while also reflecting state values related to anti-discrimination, equity and inclusion.

The state-level implications are significant. If OCR takes up the complaint, Oregon could be asked to defend the factual and legal basis for using racial and ethnic categories in funding criteria. That could include explaining whether the charter grant’s 65 percent threshold is narrowly tailored to remedy documented disparities, whether nonracial alternatives were considered, and whether the higher education formula’s targeted-population incentives can be justified under federal civil rights standards.

For charter schools, the dispute could affect eligibility for grant programs intended to support students facing academic disparities. For universities, it could raise questions about how performance-based funding models account for student outcomes without triggering claims of racial preference. For other states, the Oregon complaint is a warning that formulas designed around equity metrics may face legal challenges when they explicitly name racial or ethnic categories.

The immediate outcome depends on the federal response. OCR could decline to proceed, seek more information, negotiate voluntary changes or open a broader compliance review. Even without a formal finding, the complaint may prompt Oregon policymakers, school officials and university leaders to reassess whether equity-linked funding systems can be redesigned around income, disability, geography, first-generation status, language access or other measures that are less likely to invite constitutional challenge.

For now, Oregon’s rules remain in place, and the complaint remains an allegation. But the challenge places a technical funding issue inside one of the most consequential education-law debates in the country: whether public agencies can pursue racial equity through race-conscious funding mechanisms, or whether the current legal climate requires states to address disparities only through race-neutral tools.