The new Federal Ethnicity Code flag would collapse racial and demographic information into one line rather than multiple lines per individual. Following the IPEDS reporting requirements, which is what higher education institutions must use, it categorizes individuals into the five categories for race and follows special rules for Hispanic and multiracial. If an individual selects 'I am Hispanic or Latino' they will be categorized as 'Hispanic' over all else. If an individual selects 'African American' and 'Asian', they will be categorized as two or more races. The new field would better account for individuals that are multiracial, rather than creating multiple lines for each race they check.
The new field's simplification of the categories more accurately and concisely reports on an institution's racial and ethnic background. It greatly speeds up the time it takes to build a report as well. All of this can be currently done through custom datasets or calculations, however, it is a lengthy process that can often result in errors, especially when reporting on the historical data in this category. The time it takes to load visuals with the custom datasets are much longer than visuals created with data straight from the subject area.