EDITORS' CORNER
The Trump administration is continuing its crackdown on race-based preferences in higher education, with the Treasury Department and Internal Revenue Service on Thursday announcing proposed regulations to end federal tax-exempt status for private colleges that engage in discrimination.
“Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature. Today’s Treasury and IRS proposed regulations establish a clear standard, and the institutions that continue to use discriminatory practices will no longer receive the benefits of federal tax-exempt status,” Treasury Secretary Scott Bessent said in a statement.
Under the proposal, a private college or university would not qualify for federal tax-exempt status if it has a policy or practice that discriminates on the basis of race in “admissions, educational policies, scholarships and loans, athletics, and every other school-administered or school-supported program,” a news release states.
The final regulations are expected to take effect May 31 of next year, “providing affected institutions with sufficient time to review and update their policies to bring admissions, scholarship, and other policies into compliance,” it states.
The regulations would apply to tax-exempt private primary and secondary schools, colleges, universities, professional schools, and trade schools, the release states, adding it may effect as many as 18,000 private educational institutions, it states.
“The proposal would also eliminate outdated provisions of IRS guidance that permitted schools to favor certain racial preferences in admissions, facilities, programs, scholarships, and financial assistance,” the news release states.
The announcement marks the latest crackdown on DEI in higher education by the second Trump administration. Last month, the U.S. Department of Housing and Urban Development pledged to “aggressively” punish colleges and universities that continue to offer race-based “affinity” housing.
ABC reported private universities “have been exempt from many taxes for more than a century because they provide a public good. The benefit saves many universities millions of dollars every year.” But Trump “has seen the tax-exempt status as a lever to pull in his pressure campaign against colleges that he describes as hotbeds of ‘wokeness.’”
Last year, Trump vowed to revoke Harvard University’s tax-exempt status amid the fight between the Republican administration and the Ivy League school.
“While schools may still not owe much in federal income taxes even if they lost their tax-exempt status, the exemption is valuable because it allows donors to deduct donations they make directly to the school, helping fund-raising efforts,” according to the New York Times.
“This just opens up the door to the weaponization of tax-exempt status,” said Roger Colinvaux, a law professor at the Catholic University of America, told the Times. “It potentially gives the I.R.S. a weapon to use to chill speech or try to leverage behavior at schools.”
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