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Trump Targets Colleges' Tax Exemptions

Trump officials seek to revoke tax-exempt status for private schools with DEI policies.

September 3, 2026 · Updated Sep 3, 5:56pm ET

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What happened

The Treasury Department and IRS issued proposed regulations Thursday that would allow revocation of federal tax-exempt status for private schools and colleges that use race in admissions, scholarships, student aid or other policies. The rule targets institutions that provide race-based preferences or targeted support to minority students, including programs associated with DEI policies. If finalized, affected schools could lose nonprofit tax exemption, and donors could lose federal deductions for contributions to those institutions. Treasury Secretary Scott Bessent said the proposal is intended to set a clear standard against racial discrimination.

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