Trump administration proposes revoking tax-exempt status for private schools using race in admissions
The U.S. Treasury Department and IRS issued proposed regulations to strip federal tax-exempt status from private schools that factor race into admissions or aid decisions, effective for taxable years starting May 31, 2027.
The U.S. Treasury Department and the Internal Revenue Service announced proposed regulations aimed at ending federal tax-exempt status for thousands of private colleges that use race to influence factors such as admissions or student financial aid. If finalized, these rules would apply to taxable years beginning on or after May 31, 2027. Such a move threatens to remove the current tax break households receive on donations to universities and could potentially affect scholarships for students at affected schools. The Trump administration previously threatened to revoke tax-exempt status from any school, including Ivy League institutions, citing claims of discrimination in application processes following the Supreme Court's ruling on race-conscious admissions. Treasury Secretary Scott Bessent stated that the proposed rules are designed to root out racial discrimination in the U.S. education system, noting that institutions continuing discriminatory practices would lose federal tax benefits.
