By The Associated Press
CAMBRIDGE, Mass. — The Trump administration is proposing a new rule that would strip private schools and colleges of their tax-exempt status if they provide targeted help to students based on their race. This significant escalation in the White House's campaign aims to eradicate diversity programs directed at Black, Hispanic, and other minority students.
Proposed Changes
The Treasury Department announced the proposed change on Thursday, which, if finalized, would take effect after May 2027. The rule broadly targets any policies or programs that assist students based on race, stating that such benefits in admissions, scholarships, and facilities "would be incompatible" with the new regulation.
This move is part of the Trump administration's ongoing efforts to pressure educational institutions to eliminate diversity, equity, and inclusion (DEI) policies that had become prevalent prior to Trump's return to the White House. Officials argue that these policies discriminate against white and Asian American students.
Reactions from Higher Education Leaders
Higher education leaders have criticized the proposal. Mike Gavin, president and CEO of the Alliance for Higher Education, stated:
“"The administration's latest rules changes are its most blatant attack to keep working class Americans and people of color from accessing higher education and a better life."
He added that the administration is attempting to mislead the public by claiming that efforts to increase fair opportunities for all students are discriminatory.
Impact on Universities
Scores of universities have already shut down or rebranded their DEI offices and ended scholarships and clubs designed for minority students under pressure from the White House. In announcing the proposal, Treasury Secretary Scott Bessent suggested that even policies that no longer use the DEI label could still be targeted:
“"Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature."
The Treasury Department and IRS estimate that up to 18,000 private schools, colleges, and other educational institutions could be affected by this proposal. America's private universities have enjoyed tax exemptions for over a century, saving many millions of dollars annually.
