McDonald's settles scholarship lawsuit, drops Hispanic heritage requirement

McDonald’s settled a federal lawsuit over its HACER National Scholarship Program and removed the requirement that applicants have at least one Hispanic or Latino parent. The change came after the American Alliance for Equal Rights filed suit in the U.S. District Court for the Middle District of Tennessee in Nashville, saying the program discriminated against non-Hispanic students.

McDonald’s said it disagreed with the discrimination claim but chose to settle and preserve the scholarship rather than let the fight freeze this year’s awards. Under the revised criteria, applicants must now show their impact and contribution to the Hispanic and Latino community through activities, leadership and service. The company said more than 3,000 students had already completed applications for the 2024-2025 cycle when it made the change.

The scholarship is one of McDonald’s most visible education programs, and the timing matters inside a workforce where advancement messaging often leans on education as a route out of the counter. McDonald’s said it consulted franchisees, community leaders, educational leaders, past HACER recipients and employees before settling, then decided that changing the criteria was the best way to protect both current applicants and the program’s future.

HACER has been around since 1985. McDonald’s said the program has awarded more than $33 million to more than 17,000 students, and that the 2024-2025 awards totaled $500,000 for up to 30 recipients. Prize tiers listed by the company ranged from $5,000 to $100,000, with additional awards of $10,000, $20,000, $25,000 and $50,000. The application period remained open through March 6, 2025.

McDonald’s tied the dispute to the broader legal shift after the Supreme Court’s Students for Fair Admissions decision, which has invited new challenges to race-conscious corporate and education programs. That pressure reaches beyond a single scholarship: when a company like McDonald’s changes the rules on a flagship education benefit, crews and managers notice how stable the rest of the advancement ladder really is.

McDonald’s said HACER would continue to offer college-readiness resources in English and Spanish and keep its HACER Education Tour. For a company that sells opportunity as part of its employee brand, the settlement leaves the scholarship in place but rewrites the terms of belonging.