Trump Administration Proposes Ending Tax Exemptions for Schools With Race-Based Policies

The Trump administration proposed new regulations on Thursday, September 3, 2026, that would strip federal tax-exempt status from private schools and colleges that maintain race-based policies or programs, a move officials say could affect as many as 18,000 institutions nationwide. The Treasury Department and Internal Revenue Service announced the proposed rule, which targets admissions, scholarships, financial aid, athletics, and other school-administered benefits that consider race, color, or national or ethnic origin. Treasury Secretary Scott Bessent stated that the proposal aims to ensure racial discrimination has no place in American education. "Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature," Bessent said in a statement. The administration argues that such policies conflict with civil rights law and discriminate against white and Asian American students. The proposed regulations would apply to private primary and secondary schools, colleges, universities, professional schools, and trade schools.