Trump administration pushes to remove tax exemptions for private universities with DEI policies

[Trump Administration Pushes to Revoke Tax Exemptions for Private Colleges with DEI Programs]

The Trump administration is proposing a new rule that would strip private schools and colleges of their tax-exempt status if they provide targeted help to students based on their race, a significant escalation in the White House’s campaign to eradicate diversity programs directed at Black, Hispanic and other minority students.

ADVERTISEMENT

ADVERTISEMENT

The United States Treasury Department announced the proposal on Thursday as part of a new regulation intended to take effect following the 2027 academic year.

This rule targets any policies or programs designed to advantage students on the basis of race, explicitly declaring that benefits connected to admission decisions, scholarships, and campus facilities would be fundamentally incompatible with the new framework.

It reflects the latest component of the White House strategy to dismantle diversity, equity, and inclusion (DEI) initiatives that became commonplace before President Donald Trump returned to office with a pledge to abolish them.

Mike Gavin, president and CEO of the Alliance for Higher Education, called the new regulatory moves “the administration’s most blunt attack on giving working‑class Americans and people of colour access to higher education and a brighter future”.

He further warned of rebranding efforts intended to promote equal opportunity as discriminatory seek to mislead the American public into embracing inverted notions about race and class.

Numerous institutions have shuttered DEI departments, repurposed leadership teams, or dissolved minority‑focused scholarships and student groups under mounting White House pressure.

Treasury Secretary Scott Bessent indicated that the proposal need not be limited to formal DEI‑labeled programs; any policies perceived as favoring restricted groups could fall under scrutiny.

Bessent wrote on X that rebranding racial preferences as equitable or diversity‑enhancing does not erase their discriminatory core.

The department and the IRS projected that as many as 18,000 private schools, colleges, and other educational entities could be impacted by the legislation.

For well over a century, private universities have enjoyed extensive tax immunity—a safeguard that funds operations and generates multimillion‑dollar annual savings.

President Trump has leveraged the tax‑free status as a bargaining chip to target colleges he describes as hubs of “wokeness” and radical left ideology.

In 2023, Trump warned of cutting Harvard’s tax privilege; university officials replied that such action had no legal foundation and risked compromising financial aid and essential medical research.

Such federal confrontations over a college’s tax status are exceptionally uncommon, though the case of Bob Jones University offers a historic precedent—lost in the 1970s after imposing an anti‑interracial clause and restored to tax‑exempt standing in 2017.

A Supreme Court decision upheld the IRS’ refusal, emphasizing that ideologically motivated targets cannot receive federal enforcement.

Maintowing nonprofit classification—vital for tax‑deductible contributions—demands rigorous adherence to IRS limits on lobbying, political campaign activity, and yearly reporting.

The administration brands the initiative as a movement to restore meritocracy across the national higher‑education system.

Separately, the Justice Department has launched probes into several medical schools that it contends favorentially recruit Black and Hispanic applicants in admissions pipelines.

Additional sources • AP

Source link