Trump Administration Moves to Strip Tax Exemptions from Private Colleges with DEI Policies

The Trump administration is seeking a new way to pressure private colleges over diversity programs: threaten their tax-exempt status. A Treasury Department proposal would target schools that provide assistance based on race in admissions, scholarships or facilities.

If finalized, the rule would take effect after May 2027. It is broadly aimed at ending policies that help students because of their race, including programs that institutions may no longer describe as diversity, equity and inclusion initiatives.

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

Treasury Secretary Scott Bessent said schools could not avoid the rule simply by changing their terminology. "Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature," he said.

The Treasury Department and Internal Revenue Service estimate that as many as 18,000 private schools, colleges and other educational institutions could fall within the proposal's reach. Private universities have received tax exemptions for more than a century because they provide a public benefit, a status that saves many institutions millions of dollars each year.

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The administration's latest rules changes are its most blatant attack to keep working class Americans and people of color from accessing higher education and a better life.

The administration has used that benefit as leverage in its broader campaign against colleges it portrays as centers of progressive activism. Under pressure from the White House, dozens of universities have closed or renamed DEI offices and ended scholarships and student clubs aimed at minority groups. The administration says such programs discriminate against white and Asian American students.

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By claiming that efforts to increase fair opportunity for all students are discriminatory, the administration is trying to gaslight the American people into believing that up is down and black is white.

Higher education leaders rejected the proposal. Mike Gavin, president and chief executive of the Alliance for Higher Education, called it "the administration's latest rules changes" and said it was "its most blatant attack to keep working class Americans and people of color from accessing higher education and a better life." He accused officials of portraying efforts to expand fair opportunity as discriminatory.

The proposal recalls the rare case of a college losing its tax-exempt status in the 1970s over a ban on interracial dating. Trump also threatened Harvard University's tax exemption during a dispute with the school. Harvard said there was no legal basis for the move and warned that it would force cuts to financial aid and medical research.

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would be incompatible