- Treasury and IRS propose stripping private schools' tax-exempt status if they consider race in admissions, scholarships, or other policies.
- Proposal could affect as many as 18,000 private educational institutions, the agencies estimate.
- Rule would apply to primary and secondary schools, colleges, universities, and professional or trade schools.
- Treasury says rebranding race-based preferences as equity does not change discrimination; final rules could apply to taxable years starting May 31, 2027.
The Trump administration proposed rules Thursday to strip private schools of their tax-exempt status if they consider race in areas like admissions and scholarships, the latest move in a wider push to transform US education.
Under proposed regulations issued by the Treasury Department and Internal Revenue Service, a private school would not qualify for the status if it “discriminates on the basis of race, color, or national or ethnic origin.”
The agencies estimate that this could impact as many as 18,000 private educational institutions.
Since returning to the White House in January last year, President Donald Trump has sought to dismantle diversity, equity and inclusion (DEI) programs across the federal government and threatened companies that practice such policies, saying they hurt America’s white majority.
He has also accused US colleges of promoting “woke” anti-conservative ideologies and pushing unfair DEI policies.
The latest proposal published by the Treasury Department and IRS would apply to primary and secondary schools, colleges and universities, as well as professional or trade schools.
The final rules could apply to taxable years starting on or after May 31, 2027, the Treasury Department said.
“Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature,” said Treasury Secretary Scott Bessent in a statement.
As part of his push to bring higher education to heel, Trump has also wielded federal funds as a negotiating tool for universities that he says are too liberal, insisting that they submit to curriculum, enrollment and other changes.
