For admissions purposes, colleges recognize people from Spain as Hispanic (see post #1 on this thread).
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*Most Spaniards identify as "caucasian" when asked about their race
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Because they are. As are many other Hispanics, for instance the vast majority of Argentines are originally from either Spain or Italy and are racially Caucasian and ethnically Hispanic, there's not discrepancy in being both.
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You can be of ANY race and be hispanic.
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Agreed (see post #1 on this thead).