World & Nation
· collected 2026-09-04 · by Howard Blume, Jaweed Kaleem, Collin Binkley
Trump targets private school tax-exempt status over race-based aid.
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Trump → target → aid
California takes notice
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California → take → notice
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- The Trump administration proposes a rule letting the Internal Revenue Service revoke the tax-exempt status of private schools and colleges that offer race-based admissions, scholarships or support programs.
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that → click → admissions
Treasury and IRS officials say up to 18,000 institutions could be affected.
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institutions → say → ?
The Trump administration is proposing a new rule that would strip private colleges and private grade schools of their tax-exempt status if they provide targeted help to students based on their race, a significant escalation in the White House’s campaign to eradicate diversity programs directed at Black, Latino and other minority students.
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they → propose → students
Critics call the move blatantly illegal and shortsighted, saying it does “nothing to make education fairer.”
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education → call → nothing
The Treasury Department proposed the change Thursday in a new regulation that, if made final, would take effect after May 2027.
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that → propose → May
The rule is broadly aimed at ending any policies or programs that help students because of their race, and it specifically says such benefits in admissions, scholarships and facilities “would be incompatible” with the rule.
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benefits → aim → rule
It’s the latest attempt by the Trump administration to pressure schools and colleges to end diversity, equity and inclusion policies that President Trump vowed to eliminate.
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Trump → ’ → that
Trump officials have used civil rights laws to unwind the policies, saying they discriminate against white and Asian American students.
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they → use → students
“Private educational institutions that promote discriminatory practices will no longer be afforded the benefits of federal tax-exempt status,” said IRS Chief Executive Frank Bisignano.
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Bisignano → promote → status
“Today’s proposed regulations put institutions on notice and schools that continue to engage in racial discrimination should expect to lose that status.”
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that → propose → status
The proposed change would not only impose a tax bill on schools, but also could discourage donors who would lose the advantage of deducting the donation to lower their taxes.
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who → propose → taxes
A public comment period is expected to last until early November.
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period → expect → November
Trump targets tax exemptions to end DEI policies
In California, the proposed changes would cover more than 85 nonprofit colleges and universities, among them Stanford and USC.
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changes → target → them
The proposed rule also affects private K-12 schools — in all, more than 18,000 institutions nationwide.
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rule → propose → all
Public colleges, such as UCLA, and public school districts would not be affected, although Trump has separately threatened to pull their federal funding over race-based assistance.
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Trump → affect → assistance
The action is antithetical to the cause of civil rights, said Denise Forte, president and CEO of EdTrust, an advocacy and research group.
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Forte → say → EdTrust
“Students of color continue to face real and persistent barriers to accessing educational opportunities,” Forte said.
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Forte → continue → opportunities
“Threatening the tax-exempt status of institutions for recognizing those barriers does nothing to make education fairer.”
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education → threaten → nothing
But the proposed rules were hailed by the group Defending Education, which has filed legal challenges against DEI-related programs.
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which → propose → programs
“This is exactly the kind of clear standard that is needed,” said Erika Sanzi, the group’s senior director of communications.
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Sanzi → need → communications
“Tax-exempt status is a benefit and benefits come with certain obligations.
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benefits → come → obligations
One of those obligations is to abide by federal civil rights law.
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One → abide → law
If an institution chooses to discriminate on the basis of race, it only makes sense that they also forfeit their tax-exempt status.”
The proposed regulations would have a “chilling effect,” said Steven Bloom, assistant vice president of government relations at the American Council on Education, which represents colleges and universities.
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which → choose → colleges
“There aren’t a lot of institutions that have the resources to litigate these matters,” Bloom said.
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Bloom → be → matters
UC Berkeley law professor Brian Galle said schools should hold their ground and predicted that the proposed IRS rules would not come close to surviving a legal challenge.
“This rule is obviously illegal,” Galle said.
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Galle → say → challenge
“The only reason that this proposal will have any effect is if university presidents, their boards, and their general counsels are afraid to stand up for themselves in court.”
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presidents → have → court
“This is a thing that the administration is probably doing because they’re losing to universities that are fighting the illegal efforts to intimidate higher ed,” he added.
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he → do → ed
“Those universities are winning in court, so the administration is trying something else to further browbeat them.”
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administration → win → them
The administration has put forward a lengthy justification for its action, moving in chronological order through a list of legal citations: Brown vs. Board of Education — which outlawed segregation; Bob Jones University vs. United States — in which a university lost tax-exempt status for banning interracial dating; and Students for Fair Admissions vs. Harvard, which banned racial preferences in admissions.
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which → put → admissions
To change the long-standing IRS rules, the administration is relying on a legal doctrine of under which a tax-exempt organization cannot operate contrary to a “fundamental public policy.”
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organization → change → policy
The administration argues that this doctrine now encompasses all race-conscious school policies because there is broad and long-standing agreement that race-based programs in any form are illegal.
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programs → argue → form
But Galle said there is clearly no long-settled consensus on what the Trump administration wants to do, especially related to education programs that have not been found to be illegal.
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that → say → programs
Still, schools are likely to feel pressured to prepare for the worst, especially given the conservative majority of the U.S. Supreme Court.
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schools → feel → Court
How California colleges are reacting to the rule
Assn. of Independent California Colleges and Universities President Kristen Soares said the proposed revision “may create significant new compliance burdens and legal uncertainty for institutions.”
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revision → react → institutions
She said her organization “will work vigorously to protect this status, preserve the diverse missions of our institutions, and ensure they can continue expanding opportunity for students from all backgrounds.”
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they → say → backgrounds
Representatives from USC and Stanford did not respond to requests for comment.
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Representatives → respond → comment
Occidental College did not appear inclined to give in preemptively.
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College → appear → ?
“This action appears to be an attempt by the administration to impose its interpretation” of a Supreme Court decision “before the legal questions surrounding that interpretation are fully settled,” said Occidental College President Tom Stritikus.
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Stritikus → appear → interpretation
…and 22 more, not listed.
