Minority serving institutions, or MSIs, are colleges and universities whose primary focus is serving students from underrepresented backgrounds and promoting their advancement. These include historically black colleges and universities (HBCUs), Tribal colleges and universities (TCUs), Hispanic-serving institutions (HSIs) and Asian American and Native American Pacific Islander-serving institutions (AANAPISIs).

MSIs are highly diverse, culturally rich and tend to have close-knit communities, all of which can contribute to a well-rounded college experience. With college deadlines approaching, you may be thinking about paying to attend an MSI. But there are some considerations to keep in mind when applying to these schools. Here’s what to know.

Key HBCU statistics

Bankrate insights

HBCU meaning and cultural impact

Historically black colleges and universities, or HBCUs, are higher education institutions founded before the Civil Rights Act of 1964 whose main focus is educating Black or African American students. But as time has passed, these institutions have opened their doors to students from all backgrounds. Non-Black students now represent 24 percent of HBCUs’ student body.

HBCUs help advance their graduates’ social and economic mobility by offering affordable education to low-income and underrepresented students. This, in turn, is a step forward in bridging the racial wealth gap.

In fact, according to a report by the United Negro College Fund (UNCF), Black HBCU graduates working full-time can earn about $927,000 more throughout their career compared to Black students who graduated from a non-HBCU institution.

The report also found that HBCUs are responsible for producing 80 percent of Black judges, 50 percent of Black doctors and 50 percent of Black lawyers — all high-paying careers.

Another report from the Urban Institute found that Black students who attended HBCUs felt more satisfied with their overall college experience than their peers who attended non-HBCU institutions. They were also more likely to think their highest level of education was worth the cost.

It’s also worth noting that many HBCUs have low student-to-faculty ratios. Students may have more opportunities to get mentorship from their professors and create close-knit relationships with their peers, which fosters a better learning environment.

“I believe that these institutions have come to hold a new meaning and significance for today’s youth, with many gravitating decidedly toward them out of wanting to embrace the cultural shift we’re experiencing,” says Briana B. Franklin, co-founder, president and CEO of nonprofit The Prosp(a)rity Project.

“For instance, it used to be said that going to an HBCU was creating a false sense of reality, since ‘the world is not all predominantly Black.’ But, with there being a massive uptick in Black corporate leadership, entrepreneurship and social investment in Black-serving causes, the graduates coming out of these institutions are in many cases going from one pro-Black environment to another, which is transformative in so many ways,” she adds.

Key minority serving institutions statistics

Bankrate insights

Minority serving institutions meaning and cultural impact

Minority serving institutions, or MSIs, are colleges and universities dedicated to serving students from underrepresented groups. These institutions include not only HBCUs but also TCUs, HSIs and AANAPISIs. They enroll over five million students nationwide.

An American Council for Education (ACE) analysis found that MSIs are key to providing affordable access to higher education for students of color. Many of these students come from low-income backgrounds and are first-generation college students.

Plus, these institutions contribute to underrepresented students’ social and economic mobility by letting them move into the upper-middle class at a higher rate than non-MSIs.

“MSIs play a critical role for students of color. For example, HSIs educate over 65 percent of all Hispanics in higher education. HSIs also enroll a large number of black and Native students,” says Deborah A. Santiago, CEO and co-founder of Excelencia in Education.

“Effective MSIs bring an asset-based approach to serving students and are intentional in ensuring students of color are included in the practices that can advance the students’ success,” she adds.

Should you attend an HBCU or another minority serving institution?

While attending an HBCU, TCU, AANAPISI or an HSI has many benefits — especially if you come from one of the underrepresented groups these institutions serve — there are some things to keep in mind before you apply.

First, because many of these institutions primarily target specific segments of the population, many are small. So, if you want the big campus experience, you may want to look elsewhere.

There’s also the issue of funding. It is no secret that HBCUs, as well as other minority serving institutions, are largely underfunded. Although this may be changing soon — at least for HBCUs — thanks in part to the Biden administration’s $2.7 billion investment, it’s still a big issue.

“Though I graduated from a predominantly white institution and don’t have the HBCU experience, I have many close friends and relatives who did attend the former and have heard many stories of the lack of financial and infrastructural resources on campus that worsen the student experience,” Franklin says.

These include outdated dorms and facilities, inefficient administrations and inadequate financial aid resources — all of which can frustrate some students.

However, this is not true of all MSIs. Carefully evaluate your choices before applying to ensure you’re attending a school that you feel comfortable with and aligns with what you want from a college experience.

How to pay for college

Going to college is a big investment, regardless of the institution you choose. Knowing your financial aid options can help you reduce the cost of college but will also allow you to concentrate on what’s important: getting your degree.

Scholarships and grants

Both scholarships and grants are a type of gift aid, meaning you don’t have to pay them back. Most grants are given based on your financial need, while scholarships can be both merit-based and need-based.

Many are designated students from specific historically underrepresented groups, including Black and Latino students.

You can contact your school’s financial aid office to find out which scholarships and grants you may qualify for. You can also check out a scholarship search engine, such as the one offered by College Board.

Work-study programs

Work-study jobs are a type of federal aid awarded based on need. Unlike taking a part-time job, getting a federal work-study job won’t impact your financial aid package in the eyes of the U.S. Department of Education, so it won’t affect how much aid you receive.

These jobs can be on or off campus, depending on what’s available. They’re awarded on a first-come, first-served basis. You can indicate your interest while filling out the FAFSA.

Federal student loans

If you need to borrow money to pay for school, federal student loans should be your first choice. They tend to have lower interest rates than private student loans and offer other benefits. These include income-driven repayment plans and access to forgiveness programs.

Plus, you don’t need to pass a credit check to qualify for Direct Loans. But you must be in good academic standing and enrolled in school at least part-time. To apply for these, you’ll need to fill out the FAFSA.

Private student loans

Unlike federal student loans, private student loans are issued based on credit. You’ll need a good credit score and a stable source of income to qualify for the best terms and interest rates or have a co-signer that meets these requirements.

Although private student loans lack the protections federal student loans have, they can help bridge the financial gap when other forms of aid fall short. Some are even available to students with bad credit or little credit history.