Educational disparities between traditional and non-traditional student groups in higher distance education can potentially be reduced by alleviating social identity threat and strengthening students' sense of belonging in the academic context. We present a use case of how Learning Analytics and Machine Learning can be applied to develop and implement an algorithm to classify students as at-risk of experiencing social identity threat. These students would be presented with an intervention fostering a sense of belonging. We systematically analyze the intervention's intended positive consequences to reduce structural discrimination and increase educational equity, as well as potential risks based on privacy, data protection, and algorithmic fairness considerations. Finally, we provide recommendations for Higher Education Institutions to mitigate risk of bias and unintended consequences during algorithm development and implementation from an ethical perspective.