Trump may use IRS rules to push colleges away from race-based admissions by threatening to revoke their nonprofit tax status — a move that could hit schools hard where it counts: their wallets.
Key Facts:
- The Treasury Department is reviewing a rule that could allow the IRS to revoke tax-exempt status for colleges using race as a factor in admissions, aid, or programming.
- This would impact over 1,500 nonprofit colleges, including elite universities like Harvard and Duke.
- Removing tax-exempt status would increase schools’ tax bills and threaten donor funding and lower-cost borrowing.
- The rule could be implemented without congressional approval but must undergo a lengthy rulemaking process.
- Legal experts expect court challenges and warn it could take years before any revocations become final.
The Rest of The Story:
The Trump administration is quietly weighing a major policy shift that would reshape how higher education operates financially.
The Treasury Department is exploring a new IRS rule that could strip tax-exempt status from colleges that consider race in admissions, scholarships, or programs.
This would directly challenge longstanding diversity policies at many institutions.
Nonprofit status is vital to private colleges.
It helps them avoid taxes, reduces their borrowing costs, and, perhaps most critically, encourages charitable giving.
If this rule is enacted, schools that continue to use race as a factor could face billions in new costs.
“Losing their tax-exempt status would be existential,” warned Armand Alacbay of the American Council of Trustees and Alumni.
The administration’s push follows Trump’s repeated criticisms of elite schools.
He recently called tax-exempt status “a privilege” and accused colleges like Harvard of abusing it.
Although the proposed rule would take time to finalize, many schools are already bracing for the possibility.
Commentary:
This move is long overdue.
If a college chooses to break federal law by giving admissions preferences based on race, it shouldn’t enjoy taxpayer-subsidized perks.
These institutions have built billion-dollar endowments off a system that, in many cases, prioritizes ideology over merit.
Revoking tax-exempt status isn’t about politics. It’s about fairness.
If you want to be a charitable institution, then follow the law that bans discrimination.
The Supreme Court has already ruled that race-based college admissions violate the Constitution.
Schools that ignore this are doing so at their own risk.
Critics claim this policy would be “damaging” or “alarming,” but they miss the obvious solution: just stop using race as a factor.
If schools return to race-neutral, merit-based admissions, they won’t lose anything.
They can keep their tax perks and continue serving students — just fairly.
Some institutions seem more concerned with defending outdated DEI bureaucracies than helping all students succeed equally.
If tax reform is what it takes to push them to comply, then so be it.
Colleges had no problem throwing out SATs and GPAs in favor of vague “lived experience” metrics.
Now they recoil at the idea that accountability might come with consequences.
If anything, this shows how dependent they’ve become on unchecked privilege granted by the government.
A tax-exempt status is not a right — it’s a benefit.
When that benefit is abused to enforce race-based preferences, it becomes the government’s duty to step in.
Trump’s proposal may be bold, but it’s also grounded in common sense.
Let the courts decide, but make no mistake — colleges that continue to engage in illegal discrimination are gambling with their futures.
They should not be surprised if the public — and the government — starts calling in the tab.
The Bottom Line:
The Trump administration is exploring an IRS rule to strip tax-exempt status from colleges using race-based admissions.
While critics warn of legal battles and procedural delays, the core message is clear: comply with the law or lose federal privileges.
If colleges want to avoid financial upheaval, the solution is simple — go back to merit.
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