Treasury proposes ending tax-exempt status for schools with race-based admissions

The Trump administration has proposed regulations to strip tax-exempt status from private schools, colleges, and other institutions that provide race-based admissions, scholarships, or benefits, as part of a broader campaign against DEI programs in education. The Treasury Department and IRS contend that such race-based assistance conflicts with tax-exempt criteria and would label targeted aid as incompatible with nonprofit status, with final rules expected to take effect for tax years beginning after May 31, 2027. Officials warn the rule could affect up to about 18,000 institutions, though religious schools would retain exemptions if they maintain religious missions and use race-neutral criteria or religious factors in admissions. Critics argue the measure could restrict access to higher education for working-class and minority students and could dampen donations, while some supporters frame it as upholding equal public policy and avoiding discrimination. The administration cites legal precedents to justify turning away race-based preferences and emphasizes reforms would rely on race-neutral approaches to expand opportunities. This move represents a continuing effort to reshape how diversity initiatives are implemented in American education, drawing strong support and opposition from higher education leaders and policymakers alike.