Treasury announces rules to end tax exemption for schools with race-based aid

The Treasury Department this week announced rules to end tax-exempt status for schools that offer certain race-based programs.

An institution would become ineligible for tax-exempt status if it offered programs that discriminate on the basis of race or national origin. The Treasury estimates the policy would affect as many as 18,000 institutions.

“Under President Trump, this Administration is standing up for America’s students by ensuring racial discrimination has no place in American education,” Secretary Scott Bessent said. “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.”

The Treasury also eliminated IRS provisions that permitted schools to discriminate in admissions, scholarships, and financial aid, but permits such institutions to offer support for by other criteria.

Ben Whedon is the Chief Political Correspondent for Just the News. Follow him on X.