Trump administration targets racial discrimination in private schools; proposes ending tax-exempt status for violators | Today’s news
The US Treasury Department and the Internal Revenue Service (IRS) proposed new regulations on Thursday (September 3) that could strip private schools of their federal tax status if they engage in racial discrimination.
The proposal, announced under President Donald Trump’s administration, would target private educational institutions that adopt, maintain or enforce policies that discriminate on the basis of race, color or national or ethnic origin.
Treasury Secretary Scott Bessent said the proposed rules are intended to ensure that racial discrimination has no place in American education. He argued that schools could not avoid restrictions by describing racial preferences as “equitable,” “inclusive,” or “diversity-enhancing.”
IRS Director General Frank J. Bisignano said private educational institutions that continue to engage in discriminatory practices should expect to lose the benefits of federal tax-exempt status.
Which private schools could lose their tax-exempt status?
Under the proposed regulations, a private school would no longer be eligible for tax exemption under Section 501(a). c) paragraph 3, if it discriminates on the basis of race, skin color or national or ethnic origin.
The proposed rule would apply to a wide range of school activities, including:
-Other programs administered by the school or programs supported by the school
The regulations would apply to tax-exempt private elementary and secondary schools, colleges, universities, vocational schools and trade schools.
The Treasury Department and the IRS estimate that as many as 18,000 private educational institutions could be affected.
IRS to eliminate provision allowing racial preferences
The proposal would also remove some older IRS guidance that allowed private schools to favor certain racial groups in areas such as admissions, facilities, programs, scholarships and financial aid.
The Treasury Department and the IRS have said these provisions violate the uniform nondiscrimination standard and run counter to recent Supreme Court case law.
The proposed regulations cite landmark cases including Brown v. Board of Education, Bob Jones University v. United States, and Students for Fair Admissions v. Harvard.
Religious schools could still maintain religious missions
The proposed rule would not prevent religious schools from maintaining their religious identity, curriculum, or programs of religious observance.
Religious schools could continue to select students based on actual religious affiliation or membership in accordance with existing federal law.
The proposal also clarifies that schools could continue to use race-neutral criteria to expand opportunities for disadvantaged students.
Such criteria may include:
-State of the first generation college
However, schools would not be allowed to use race, color, or national or ethnic origin as a basis for admissions, financial aid or other benefits.
When would the new rules come into effect?
The regulations are currently draft, which means they are not yet final.
If finalized, they will apply to tax years beginning on or after May 31, 2027. The Treasury Department and the IRS said the timeline will give affected institutions time to review their policies and make changes to admissions, scholarships and other programs.
The Trump administration’s broader education policy
The proposed regulations are part of a broader effort by the Trump administration to end what it describes as discriminatory practices and restore what it calls merit-based educational opportunity.
The administration says the new tax rules would create a clearer and more uniform standard for private educational institutions that want to maintain federal tax-exempt status.
Read also | US birthright citizenship: US proposes new passport rules for children
