This article discusses the curious mix of good and bad news the American higher education community found in the U.S. Supreme Court's ruling last summer, in "Parents Involved v. Seattle School District" and "Meredith v. Jefferson County Board of Education," about the use of race-based policies by public elementary and secondary schools. The good news: "Grutter lives!" Most observers agreed that the ruling reaffirmed the high court's 2003 "Grutter v. Bollinger" decision that had sustained race-sensitive admissions policies at the University of Michigan Law School. The bad news: it was far from clear just what legal principles "lived," because of sharp splits among the justices and pervasive ambiguities in the earlier ruling. More bad news emerged as the summer wore on. Observers realized that the Court's curb on the use of race-based desegregation remedies in public schools would almost certainly reduce the pools of well-prepared applicants from minority groups that have historically been underrepresented in higher education (mainly African American and Hispanic students). Fewer qualified minority applicants will mean that achieving and maintaining diversity on college and university campuses will be even more challenging. In the end, the most recent ruling left open a host of questions of great importance to faculty and academic administrators.