This article assesses the extent to which indigenous grants administered to school pupils and university students in Chile can be considered affirmative action towards social justice. Drawing on Fraser's framework for parity of participation, I question whether the grants are able to provide both redistribution and recognition for indigenous pupils. I provide a historical policy analysis of education reform in regards to indigenous populations, and a discussion of secondary school Mapuche pupils' responses to governmental compensatory measures. Indigenous grants have long been employed as a strategy for increasing indigenous pupils' participation in the education system, but when viewed from a critical perspective, do little to alleviate inequalities in a culturally homogenising and strongly neoliberal-led education system. The article demonstrates that by viewing the impact of these policies--ingrained in a structural history of exclusion and discrimination--from the ground up, nuanced effects on pupils' ethnic identity formation can also be perceived. Drawing on data from 20 focus groups conducted in the Araucanía Region of Chile, I argue that indigenous grants can have adverse effects on family and community relations, whilst also causing negative self and public perception regarding achievement disparities. Without further reform to the education system and the grants themselves, they may only provide an impetus for improving access to a mono-cultural discriminatory schooling system.