Trump Targets Tax Exempt Status for DEI Schools
Left 60%
Center 0%
Right 40%
3 left · 0 center · 2 right
What happened
The U.S. Treasury Department and Internal Revenue Service proposed regulations that would deny federal tax-exempt status to private schools, colleges, and other educational institutions that consider race, color, or national or ethnic origin in admissions, scholarships, loans, athletics, facilities, or other school-administered programs. If finalized, the rules would apply to taxable years beginning on or after May 31, 2027; the agencies estimated they could affect as many as 18,000 private institutions and about 750,000 students who may qualify for race-based scholarships. Treasury Secretary Scott Bessent said that schools rebranding race-based preferences as diversity or inclusion does not change “their discriminatory nature,” while the proposal would still allow race-neutral criteria such as family income, geography, or first-generation status and would not bar religious schools from selecting students by religion. The action follows the Supreme Court’s 2023 Students for Fair Admissions v. Harvard decision, which held most race-conscious college admissions unconstitutional, and invokes the 1970s revocation of Bob Jones University’s tax exemption over a ban on interracial dating, a step the Supreme Court later upheld.
Omitted — what each side leaves out
Unpacked
Left-leaning coverage omits that the proposed rule still allows schools to favor students by income, geography, or first-generation status. That omission makes the plan read as a ban on helping disadvantaged students rather than a ban on using race. ABC News presents the Treasury plan as ending any help for students because of their race, with no mention of those alternatives. Right-leaning coverage reports the carve-out, and Fox News notes the Treasury would still let schools help disadvantaged students on race-neutral grounds.
Left-leaning coverage frames the school policies as assistance for minority students, while right-leaning coverage frames them as bias against white applicants. ABC News describes diversity programs aimed at minority students. Fox News says the rules aim to end what officials argue is "discrimination against white students."
How many of the private schools in the Treasury estimate currently use race in admissions or scholarships at all?
Bottom line
You would not know from ABC News that a private school could keep its tax exemption while still giving extra aid to first-generation or low-income students. Fox News printed that Treasury allowance.
The receipts — 6 facts one side's coverage lacks
- The Treasury said the proposal would not prohibit schools from helping disadvantaged students using race-neutral criteria, including income, geography, or first-generation status.
- The Supreme Court upheld the IRS decision to deny Bob Jones University tax-exempt status over a ban on interracial dating.
- The proposal would apply to programs that consider race for any purpose, including efforts to address past racial discrimination.
- Laws forbid the IRS from targeting individuals and organizations for ideological reasons.
- Losing 501(c)(3) status would remove deductibility of taxpayer contributions to those organizations.
- The American Association of University Professors said it is considering legal action against the proposal.
The Left View
Left-leaning outlets portray the proposal as a significant escalation in a White House campaign to eradicate diversity programs directed at Black, Hispanic, and other minority students. ABC News said Trump has treated tax-exempt status as a “lever” against colleges he describes as hotbeds of “wokeness,” noted that Harvard previously argued there was no legal basis for stripping its exemption and that doing so would force cuts to financial aid and medical research, and observed that laws forbid the IRS from targeting organizations for ideological reasons. Denise Forte of EdTrust, quoted by CNBC, said the administration “threatens to use the power of the federal government to punish schools and colleges for doing what we should expect them to do: recognize barriers to opportunity and work to remove them,” adding, “Addressing racial inequity is not discrimination.” CNBC also stressed that loss of 501(c)(3) status would generally end deductibility of donations and could leave race-restricted scholarships—including those with donor-imposed conditions—in legal uncertainty.
The Right View
Right-leaning outlets frame the proposal as cutting off a subsidy for racial discrimination that many schools have tried to conceal after the 2023 admissions ruling. The Federalist said the rule targets schools that “claimed to get rid of their DEI departments and policies, but in reality have only hidden them from public scrutiny,” citing Harvard’s rename of its DEI office as the “Office of Community and Campus Life” and a Justice Department determination that Yale Medical School discriminated based on race, and argued the standard would also reach school-supported “affinity groups” and race-matching of doctors and patients. Fox News reported that officials aim to end “discrimination against white students in favor of students of color” and would cover any program that considers race “for any purpose,” including efforts to address past racial discrimination. Both emphasized that race-neutral criteria and religious admissions would remain permitted, presenting the change as restoring merit.
Our Take (balanced)
The left’s strongest argument is that recognizing racial barriers is not discrimination, so using tax exemption to forbid remedial programs punishes schools for expanding opportunity and would shrink donations, aid, and scholarships—backed by Forte’s claim that “Addressing racial inequity is not discrimination” and by the documented risk to deductibility and donor-restricted funds. The right’s strongest argument is that racial preferences remain discrimination regardless of branding, and that tax-exempt status has long required compliance with a public-policy ban on racial discrimination, backed by Bessent’s statement that rebranding “does not change their discriminatory nature,” examples of renamed DEI offices, and the Bob Jones precedent. The central unresolved tension is whether race-conscious efforts to remedy inequality are themselves racial discrimination incompatible with charitable status, or whether equating those efforts with exclusionary uses of race inverts the civil-rights standard the exemption is said to enforce.
8 sources
- Treasury Targets Tax Exemptions for Schools Over Racial Policies
- Trump administration aims to strip schools’ tax exemption if they consider race
- Trump Moves to Strip Tax Exemption From Schools That Aid Minority Students
- Trump administration pushes to remove tax exemption for private colleges with DEI policies
- Trump admin targets tax-exempt status at private colleges — threatening a key tax break for donations
- Trump moves to end tax-exempt status for schools that help minority students
- New IRS Rule To Strip Private Schools At All Levels Of Tax-Exempt Status For Using DEI
- Trump administration proposes stripping tax-exempt status from schools using race-based programs
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