(J. Tyler Franklin / LPM)In February this year, the University of Louisville Foundation made an unusual request. In two separate petitions, Kentucky’s second-largest university asked Jefferson County judges to allow them to change the rules of five privately-funded scholarships designed for women and Black students.The university argued a new state law banned diversity, equity and inclusion, and made it impossible to give out those funds with the current criteria. The foundation’s administrator said they couldn’t reach the families of the original donors — each were created decades ago, all through bequests. One judge readily granted the petition to scratch the requirement from four funds originally designed for women. But another rejected the argument wholesale.Jefferson Circuit Court Judge Eric Haner warned the UofL and the attorney general’s office, which joined in the suit, that his denial should be “a lesson for what is not to occur in the future.”“The Court is uncertain if the Foundation and the Attorney General’s office just simply failed to read the law, or whether they engaged in willful obfuscation,” Haner wrote.Republican Attorney General Russell Coleman and the university foundation are appealing the decision. In late October, Coleman’s office asked to argue before the appeals court, and he noted the foundation agrees the scholarship “must be changed.”Public universities across Kentucky are wrestling with what to do with existing scholarship funds with restrictions based on race, gender or sexual orientation — all criteria banned under 2025’s House Bill 4.However, that same bill provides an exception for pre-existing scholarships, allowing them to continue until they run through their remaining balance.Many public universities are instead choosing to ask donors to change their existing criteria or, failing that, pausing the funds altogether, public records show. UofL’s lawsuit and arguments from the attorney general’s office provide insight into why, and have angered community members who had hoped universities would try to maintain the original intent of the scholarships.UofL Pan-African Studies Professor Ricky Jones told KPR he found the facts of the case “damning” and the foundation’s decision to fight the judge’s ruling evidence that they are going beyond merely complying with the state law designed to eliminate DEI at public universities.“I don't know any way around the very stark reality and belief that this is something that the leaders of this university simply want to do, and they are enlisting the attorney general to help them do it against the ruling of a judge who told them they're behaving unlawfully,” Jones said. “It also flies in the face of the constant refrain from the university that ‘We're just following the law.’”Other Kentucky universities, including Western Kentucky University, have paused at least one scholarship indefinitely because the original donors were unwilling to change the criteria reserving it for specific identity groups.Coleman said in a statement that his office is working closely to make sure state universities are following state law, U.S. Supreme Court precedent and “fundamental principles of fairness in higher education.”“It’s surprising this is even a controversy in 2026. We are confident Kentucky’s courts will see the merits of our case,” Coleman said. “Kentucky is home to some of the best colleges and universities in the country that are producing a new generation of scholars, leaders, and citizens. I am proud to work with our public institutions to promote fair access to all Kentucky students.”‘Failure of conscience’When she died in 1952, Lucille Newmark created a scholarship in her will specifically designed for “colored students” attending UofL’s medical school. In court documents, UofL Foundation CEO Keith Sherman said the foundation tried numerous methods to try and track down Newmark’s heirs, to ask them to willingly change the criteria she laid out in her will almost 75 years before.The foundation insisted, alongside the attorney general, it couldn’t administer the fund otherwise. After a judge disagreed, they are now asking a higher court to overrule him. In a brief filed before the appellate court, Kentucky Solicitor General Matthew Kuhn argues it would violate the 14th Amendment’s equal protection clause and that the state law — which specifically excludes preexisting scholarships — applies to this one too.The law allows pre-existing scholarships to continue “until the balance of the corpus is exhausted.” Since the Newmark scholarship — and many others — are designed to only draw on interest, and therefore never dwindle, he argues it shouldn’t be allowed to continue at all without substantial changes.“The legislature gave a university with a violative scholarship a choice: the university can exhaust the corpus of the scholarship or, as the UofL Foundation is seeking to do, the university can change the scholarship to remove the race-based restriction,” Kuhn argued in the brief.Neither the university, its foundation nor the law’s original sponsor GOP Rep. Jennifer Decker of Waddy responded to requests for comment. However, during questioning in a Senate committee, a Democratic lawmaker specifically asked Decker about existing privately funded scholarships set aside for specific identity groups.“If there are privately funded scholarships that exist before the effective date of this act, they will continue to be paid out until the corpus is exhausted,” Decker said.Some UofL community members argue the fight over scholarship criteria shows the university is over-complying with House Bill 4 and going well beyond its requirements by proactively eliminating opportunities designed to help historically disadvantaged students.“It's a failure of conscience. It's a failure of humanity. And so it could be that the state of Kentucky is telling the universities here, ‘If you don't help us in damaging Black people, we're going to take your money,’” Jones said. “If the universities are giving into that and not very specifically stating it in 2026 and fighting it, by the way, then there's something very, very wrong with the leadership at the universities as well as the leadership in the political arena here in the state of Kentucky.”Sadiqa Reynolds is a former UofL board member and former president of the Louisville Urban League. She told KPR she is deeply concerned about the foundation’s treatment of scholarship funds.“I think any scholarship that meets the exception shouldn't be in court, and the [attorney general] shouldn't even be reviewed,” Reynolds said. “I think this never goes to court. I think it's ridiculous, and I think Judge Haner did an outstanding job in the opinion.”Reynolds said the university used resources to file the lawsuit, but has also spent money trying to comply with the new law, scouring its documents and wording for anything hinting at diversity or equity.“When you think about the resources, they have probably spent 10 times that trying to change language, proactively complying,” Reynolds said. “That's what's even more offensive.”Current Louisville Urban League Lyndon Pryor said in a statement that UofL’s leadership is “voluntarily engaging in harmful and racist behavior” by trying to change the criteria of the scholarship instead of making use of HB4’s exemption.“The University has an obligation to maintain her desires and if cannot or will not, they should send those funds to an institution that will,” Pryor said.After meeting with Kentucky AG, universities issue supplemental policyIn September and October last year, lawyers with the attorney general’s office reached out to the leaders of all nine public universities. In nearly identical emails, Christopher Thacker with the attorney general’s office told most that their review identified “areas of apparent non-compliance” and requested a meeting.Each of the universities then provided a “supplemental report” that laid out more details of how they would comply with House Bill 4. The University of Kentucky said it would review all privately funded scholarships and said “any awards containing language related to race, sex or identity have been revised or inactivated.”Northern Kentucky University said it has “ceased award” of all privately funded scholarships with a restriction based on race of sex and are otherwise “working with donors” to change the terms of their scholarship funds.Murray State University said it notified donors about scholarships “requiring attention.” Morehead State University said all scholarships that don’t align with HB4’s restrictions “have either been suspended or are being revised.” James Orlick, a PhD candidate at UofL who is studying the implementation of HB4, provided KPR the communications he obtained via Open Records Request. Western Kentucky University has already made headlines for shuttering a scholarship fund that gave a preference based on race and ethnicity, but also to first-generation college students and those with financial need. WKU froze the Ed Bohlander Scholarship Fund, which was named for a late professor after his widow refused to change the criteria for the scholarship designed for students studying sociology or criminology.Bohlander’s sister Gretchen LaGodna, who is a retired UK professor herself, said WKU’s College Heights Foundation informed them that if they don’t change the criteria, that no funds would be distributed to students, no donations would be accepted and it would no longer be collecting interest.“We would be doing a disservice to donors as well as to his legacy,” LaGodna said. “All know that the cost of college is escalating, and that the state support is de-escalating, and so it seems especially harmful to do things that cut off resources to students that desperately need it in order to continue their education.” ...read more read less