Trump Administration Targets Tax Breaks for Private Schools
The proposal could affect as many as 18,000 private schools, colleges and universities if finalized, Treasury and IRS officials said.
- On Wednesday, the Treasury Department and Internal Revenue Service proposed regulations to end federal tax-exempt status for private schools engaging in racial discrimination, fulfilling President Donald Trump's executive orders aimed at restoring merit-based opportunity.
- Covering admissions, scholarships, loans, athletics, and other educational policies, the Department estimates the regulation could affect as many as 18,000 private educational institutions across primary, secondary, and trade schools.
- Treasury Secretary Scott Bessent said the proposal will "establish a clear standard" for institutions, noting that rebranding race-based preferences does not change their discriminatory nature, disqualifying them from Section 501 tax-exempt status.
- Mike Gavin, Alliance for Higher Education president and CEO, characterized the administration's changes as a "blatant attack" on access for underrepresented groups, fearing the regulation could negatively impact college-expansion programs.
- If finalized, the rule would apply beginning on May 31, 2027, providing private institutions time to update their policies to comply with the new federal standards, though the regulation remains open to public comment.
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Trump administration targets tax breaks for private schools
(The Center Square) – The Trump administration is proposing to remove the federal tax-exempt status of private schools that use race-based admission or diversity, equity and inclusion in certain school policies and programs.
IRS Proposes New Regulations on Nondiscrimination for Tax-Exempt Schools
In September 2025, the Internal Revenue Service (IRS), jointly with the Department of the Treasury, issued its Priority Guidance Plan (“Plan”) for the 2025-2026 fiscal year. In this Plan, the IRS signaled its intent to issue “[g]uidance on the application of the fundamental public policy against racial discrimination, including consideration of recent case law, in determining the...
New Rule Would End Tax Breaks for Private Schools That Discriminate
The Department of the Treasury and the Internal Revenue Service have issued proposed regulations that would end federal tax-exempt status for private schools that engage in racial discrimination, an action officials said delivers on President Trump’s executive orders aimed at ending discrimination and restoring merit-based opportunity. “Under President Trump, this Administration is standing up for Read more...
DEI could cost private schools, colleges tax-exempt status under proposed Trump rules
The Trump administration proposed new regulations to end the tax-exempt status for private schools engaging in diversity, equity, and inclusion practices, putting private educational institutions “on notice.” The Treasury Department and Internal Revenue Service proposed the rules, which, if enacted, would go into effect after May 2027 to give schools time to update their policies. […]
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