I was born and raised in Hawaii. My parents were born there was well, as were my grandparents. But my race is still not Hawaiian. I had friends who were part (or fully) Native Hawaiian, I lived there, I ate the food, I experienced the culture, and my family had lived there for generations–but that doesn’t change my or my family’s ancestry.
Having a parent who lived in Spain, having close friends (even if you consider them family) who are Spanish, speaking Spanish, and growing up in a predominantly Latino/a neighborhood are all great things, but they don’t make you Spanish. I have a friend who lived in Mexico, speaks fluent Spanish, has a lot of friends who are still in Mexico, and knows a lot about the intricacies of Mexican culture–but she still says that she is not hispanic/latina when asked because…she’s not.
Yes, the question can be weird and confusing. It can sometimes be difficult for students to choose which box they want to put themselves in (and I get it–I’m of mixed race too). And your daughter can check whatever box she wants to check. But in my opinion, she shouldn’t say that she’s Hispanic/Latina because–as you said so in your original post–she’s not. I think you and your daughter know the answer here or else you wouldn’t be asking this question.
I’m sure this is not where you are coming from and that you and your daughter are just a part of a large number of people who identify with cultures that they may not have been born into, but it does sound like you are grasping at straws here. I’m really sorry, but I can’t help but wonder if you would be debating the same issue if the situation were reversed. If you were Hispanic “by birth” (as you call it) but you and your daughter identified more strongly with a different culture (like Chinese, for example), would you be wondering if you should mark “No” for the question asking if she were Hispanic? Why is this suddenly an issue now when it wasn’t an issue when your daughter was filling out her SATs?
If this is the only concern, then I think it depends a lot on how this is addressed. If she randomly mentions her “Spanish family” with absolutely no context, then I think anyone would be confused, regardless of what she put as her ethnicity. But if she introduces it in another way–perhaps, discussing friends who she considers her family and how important they were in her discovery of culture and race and origin–then I don’t think it’s an issue at all. She should be writing her essay so that people who don’t know anything about her or her background will understand who she is and where she’s coming from. If the way she has written her essay makes it so that she needs to change her ethnicity in order to make it make sense, then something is very wrong there.
Perhaps, she could have her essay read by a teacher or counselor who can act as a third party and see if her essay reads well and makes sense to someone who doesn’t know details about her personal background. If the essay is really the issue here, then you might be able to get good responses from people who have actually read her essay.