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WASHINGTON — The Trump administration is proposing a new rule that would strip private schools and colleges 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.
The Treasury Department proposed the change Thursday in a new regulation that, if made final, would take effect after May 2027. 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.
It’s the latest attempt by the Trump administration to pressure schools and colleges to end diversity, equity and inclusion policies that had become common before President Trump returned to the White House with a promise to eliminate them. Trump officials have used civil rights-era laws to unwind the policies, saying they discriminate against white and Asian American students.
The Treasury Department and the Internal Revenue Service estimate that up to 18,000 private schools, colleges and other educational institutions nationwide could be affected by the proposal.
In California, the proposed changes would cover the more than 85 nonprofit colleges and universities that belong to the Assn. of Independent California Colleges and Universities, among them Stanford and USC. The proposed rule also affects private K-12 schools.
Steven Bloom, assistant vice president of government relations at the American Council on Education, which represents colleges and universities, said he expects colleges to change course long before enforcement of the federal rules.
“I think it will have a chilling effect on the behavior of folks on campus,” he said. “There aren’t a lot of institutions that have the resources to litigate these matters.”
Assn. of Independent California Colleges and Universities President Kristen Soares said the group was “reviewing the proposed IRS regulations and their potential impact,” adding that “our institutions are committed to complying with applicable civil rights laws.”
“The proposed rule may create significant new compliance burdens and legal uncertainty for institutions already operating in accordance with existing nondiscrimination requirements…,” the statement said. “AICCU 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.”
Representatives from USC, Stanford and Occidental College did not respond to requests for comment. A spokesperson for Pomona College declined to comment.
The proposal would not affect the University of California, California State University or the state’s community colleges because they are public institutions.
But California’s public higher education systems have been targeted in the administration’s wider campaign against race-related programs. Since last year, federal agencies have investigated UC admissions and hiring, demanded nearly $1.2 billion from UCLA in part over allegations of use of race in admissions — which UC denies. The administration also ended grants that sent tens of millions of dollars a year to Cal State and community college campuses that provide academic and mentoring support that serve a high percentage of Latino students.
Federal grant cuts deemed ‘discriminatory’ by the Trump administration are forcing California community colleges and CSUs to eliminate key student support programs.
