• The Trump administration proposes to strip tax-exempt status from 18,000 educational institutions offering race-based benefits.
• The change would target private schools, colleges, and universities providing scholarships or admissions support based on race.
• Treasury Secretary Scott Bessent emphasizes that rebranding race-based programs does not change their discriminatory nature.

The Trump administration has announced a proposal to revoke the tax-exempt status of private schools and colleges that provide benefits based on race, a move that could impact as many as 18,000 educational institutions. This action is part of a broader initiative to eliminate diversity, equity, and inclusion (DEI) programs that have been criticized by the Trump administration as discriminatory against white and Asian American students. The proposed regulation, introduced by the Treasury Department, would apply to admissions, scholarships, and all other school-supported programs that consider race "for any purpose," including addressing past racial discrimination, according to latimes, indiatimes, reuters, and npr.

The rule would specifically prohibit schools from providing race-based scholarships or admissions support while allowing race-neutral considerations such as family income or individual hardship. Scott Bessent, the Treasury Secretary, warned that simply changing the description of such programs would not exempt institutions from the proposed regulations. "Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature," he stated, according to latimes and npr.

If enacted, the proposed regulations would take effect after May 2027 and are expected to face public commentary and potential legal challenges. Historical precedents, such as the revocation of Bob Jones University's tax-exempt status in the 1970s following its interracial dating ban, highlight the federal government’s ability to strip tax benefits under specific circumstances. The current administration cites recent Supreme Court rulings limiting considerations of race in admissions as further justification for the proposed changes, as detailed in reports by indiatimes and reuters.

Critics, including leaders in higher education, have labeled the proposal as a significant attack on access to education for marginalized groups. They contend that diversity initiatives are crucial for addressing systemic inequities faced by these groups. For instance, Mike Gavin, president of the Alliance for Higher Education, argued that such proposals misrepresent efforts aimed at increasing opportunity as discriminatory practices. These perspectives were echoed widely by various institutions and advocates, highlighting the ongoing tension between federal education policies and civil rights, as reported by npr and reuters.