Trump moves to end tax-exempt status for schools that help minority students

The Trump administration moved on Thursday to end tax-exempt status for private schools that provide preferential treatment to minority students.

The Treasury Department and IRS issued a proposed regulation that would provide a “clear standard, and the institutions that continue to use discriminatory practices will no longer receive the benefits of federal tax-exempt status,” according to Treasury Secretary Scott Bessent.

This would apply across the administration of a school’s “educational, admissions, scholarship, athletic, or other policies” because “the fundamental public policy of the United States [is] against such practices.”

Bessent added that, “Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature.”

It would be enforced in around 18,000 private primary and secondary schools, colleges, universities, professional schools and trade schools in the United States.

Senate Minority Leader Chuck Schumer (D-N.Y.) slammed the Treasury Department and IRS’s move, saying, “since the beginning of his term, [President] Trump has led a full-fledged assault on American education: defunding it, radicalizing its agenda, and dismantling it.”

“Senate Democrats will continue to fight to ensure that every child has access to a good education and that America continues be a land of opportunity for all,” he added.

Federal law allows for tax-exempt status to organizations that operate “exclusively for charitable and educational purposes” but can be revoked if institutions do not comply with “fundamental public policy, including the prohibition against racial discrimination.”

The Treasury Department also asserted previous regulations were “inconsistent” with past Supreme Court decisions — citing Brown v. Board of Education, Bob Jones University v. United States, and Students for Fair Admissions v. Harvard — and needed to change.

The Supreme Court, in 2023, upended affirmative action in a program that U.S. institutions have used to select students from their applicant pools.

The court’s six conservative justices ruled against affirmative action practices at Harvard and the University of North Carolina at Chapel Hill — finding that programs “employ race in a negative manner.”

“In other words, the student must be treated based on his or her experiences as an individual—not on the basis of race,” Chief Justice John Roberts wrote for the majority.

The Justice Department similarly found in August that the Duke University School of Law racially discriminated against students by “using ‘diversity’ essay questions” in the admissions process.