Racial identification is highly subjective.
Sephardic Jews are Spaniards by origin; we branched out to the Near East and to many nations in Latin America. In fact, many Hispanics are really bnei anusim and are of Jewish seed (Hispanics with last names such as Abreu-which means Hebrew, Benzaquen, etc. are Jewish, or at least, mi zera yisrael). And Benjamin Cardozo, a”h, is considered the first Hispanic on the Supreme Court.
In the case of what this principal did, I oppose it 100%. Also, Sephardim in this country are enormously wealthy, and predominately Syrian. Many Syrians aren’t Sephardic, but are Mizrachim; i.e. they have no origins or roots in Spain. Also, they’re loaded and have no right to take advantage of scholarships that are owed to poor and disenfranchised kids. These are people whose fathers are involved in all kinds of commerce and businesses, including Duane Reade, Jordache, Crazy Eddy, Century 21, Strawberry, Conway, and others, and not always honestly, as you can recall from the FBI raids on that community in 2008.