Governor Gavin Newsom signed Assembly Bill 2374 on Tuesday, creating a California pathway for colleges and universities to earn official recognition as Asian American and Native Hawaiian Pacific Islander-Serving Institutions. The new state designation carries no attached funding, but it gives campuses a formal way to show they are investing in AANHPI student success at a moment when federal dollars for that work have dried up.
The signing comes after the U.S. Department of Education announced in 2025 that it would end funding for several minority-serving institution grant programs, according to the Sacramento Bee. The federal government had allocated roughly $350 million to those grant initiatives in 2025 before reprogramming the money into other administration priorities, the Bee reports. An April 2026 report from the Assembly Higher Education Committee estimated the cancellations cost California's public higher education systems more than $115 million combined, including $61.4 million for community colleges, $43 million across 19 CSU campuses, and up to $14 million for the University of California system.
Under the program that lost funding, colleges and universities needed at least 10% undergraduate enrollment from Asian American, Native American, and Pacific Islander students, along with a high share of low-income students, to compete for the federal grants. Those dollars had funded academic advising, retention programs, and capacity-building resources, per the same committee report. The Department of Education justified ending the funding by arguing, according to the department's own statement relayed in the Bee's reporting, that the programs discriminated by conferring government benefits exclusively on institutions meeting racial or ethnic enrollment quotas — a rationale civil rights and education advocates rejected, according to OCA - Asian Pacific American Advocates, which contends the grants were designed to close socioeconomic educational gaps rather than enforce quotas.
How the New State Designation Works
Starting January 1, 2027, when the law takes effect, applicant institutions must submit a certification of commitment to AANHPI student groups along with academic goals and a strategic plan, the Bee reports. The chancellor of the California Community Colleges will develop the application process, and a nine-member governing board with representatives from all segments of public higher education will decide whether to award the designation.
Institutions that receive the designation keep it for five years and can apply for renewal afterward. The framework mirrors a parallel structure lawmakers built for Hispanic-Serving Institutions: AB 2374 advanced alongside Senate Bill 1255, authored by Senator Eloise Gómez Reyes, which establishes a similar state-level HSI designation, according to the Hispanic Association of Colleges and Universities. California is already home to 179 HSIs and more than 70 dual-designated HSI and AANHPI institutions, the largest concentration of any state, the association notes.
Assemblymember Mike Fong, who chairs the Assembly Higher Education Committee and the Asian American and Pacific Islander Legislative Caucus, said the designation will help students choose institutions where they will be welcomed and supported, according to the Bee. Fong said California is reaffirming support for AANHPI students and the institutions serving them. Newsom said AB 2374 supports Asian American and Native Hawaiian Pacific Islander students with resources and opportunities to succeed, per the Bee's account of the signing.
Why Community Colleges Carry Outsized Stakes
California Community Colleges enroll more than 2.2 million students, with AANHPI students representing more than 10% of that enrollment, the Bee reports. The California State University system enrolls more than 470,000 students, 15% of them AANHPI, while the University of California enrolls 300,000 students with AANHPI students making up more than 30% of that total.
Community colleges bear a particular weight in this story. Research published in March 2025 found that 44% of Asian American college students and 50% of Native Hawaiian and Pacific Islander college students in California attend two-year community colleges, compared with 18% and 23% nationwide, according to AAPI Data. California accounts for half of the national total of Asian American two-year community college students, the same research notes.
Those enrollment numbers mask sharp disparities within the broader AANHPI category. A May 2026 report from the Campaign for College Opportunity found that while 61% of Asian American adults in California hold a bachelor's degree, only 22% of Native Hawaiian and Pacific Islander adults and under 30% of Cambodian, Hmong, and Laotian adults hold four-year degrees. The report also found that one in five Southeast Asian and NHPI children in California lives in poverty.
Campuses Already Feeling the Federal Cuts
The financial fallout has already reached individual campuses. San Joaquin Delta College lost $1.8 million three years into its five-year federal grant cycle, while Fullerton College lost the federal grant supporting its APIDA Amplified student mentorship initiative, which served more than 4,600 Asian, Pacific Islander, and Filipino students, according to reporting by The Hornet. Several California universities lost thousands of dollars in funding after the federal grant changes, the Bee reports.
The federal program that once supported those campuses traces back to the College Cost Reduction and Access Act of 2007, which required institutions to maintain at least 10% undergraduate AANHPI enrollment and a high proportion of low-income students to compete for grants, according to the American Association of State Colleges and Universities. Those federally eligible institutions represented just 6.1% of all U.S. colleges and universities but enrolled over 40% of all Asian American and Pacific Islander undergraduates nationwide before the rollbacks, per a Scholars Strategy Network analysis.
California has also maintained its own funding stream separate from the new designation. The state's AANHPI Student Achievement Program allocated $6.48 million in fiscal year 2023-24 across 50 community colleges for culturally responsive mental health counseling, tutoring, and basic-needs support, according to the California Community Colleges system. That program traces back to 2022 legislation providing $16 million in ongoing funding to the CSU and community college systems, the Bee reports, and each participating community college received $129,000 in flexible state allocations under the effort.
The AB 2374 designation itself comes without that kind of direct appropriation attached, leaving open the question of whether formal recognition alone can offset the millions in federal grant dollars that once funded campus counselors, tutors, and specialized support programs. Lawmakers and advocates point to the accountability structure — the certification requirements, the strategic plans, the governing board's oversight — as the mechanism meant to keep campuses focused on AANHPI student outcomes even without new state dollars behind the label.
