Trump administration proposes tax rules targeting race-conscious school policies
US Treasury proposes revoking tax-exempt status for schools using race-based policies, citing recent Supreme Court rulings.
The Trump administration has unveiled a new regulatory proposal that would revoke the tax-exempt status of educational institutions that consider race in admissions, scholarships, or any school-administered program. The draft rules, issued by the US Treasury Department and the Internal Revenue Service, mark the latest move in a broader federal campaign against diversity initiatives in education.
Treasury Secretary Scott Bessent defended the proposal, arguing that schools cannot disguise discriminatory practices by rebranding them as equity or inclusion efforts. The rules would apply to all education levels and cover admissions, financial aid, athletics, and other school-supported activities, including programs designed to address past racial discrimination.
The proposal draws on recent Supreme Court rulings that restricted the use of race in college admissions. It would not affect religious schools selecting students on the basis of faith, nor would it bar institutions from assisting disadvantaged students through race-neutral criteria such as income, geography, or first-generation status.
The Treasury estimates that up to 18,000 schools and 750,000 students could be affected. The American Association of University Professors has signaled it may pursue legal action, with its president, Todd Wolfson, calling the move an attempt to turn civil-rights law against those it was designed to protect.
The plan is subject to a public comment period and is expected to face legal challenges. It follows a series of federal actions against universities, including funding freezes and investigations targeting institutions such as Harvard University.