Why the Trump administration’s bid to end diversity efforts at nonprofit schools is likely to get tied up in court
A proposed Trump administration rule aimed at quashing diversity efforts could jeopardize the nonprofit status of private schools. It could take effect in mid-2027.
The Trump administration is proposing to end tax-exempt status for nonprofit private schools and colleges that use race as a criterion for eligibility in any of their programs. This includes academic, athletic, and scholarship programs, as well as admissions policies aimed at increasing diversity. The rule could affect 18,000 private schools with 750,000 students, and the IRS estimates the impact would be significant.
The proposed rule is based on the Trump administration's definition of racial discrimination, which considers any racial preference as wrong and grounds for terminating government support. The administration cites two Supreme Court cases, Bob Jones University v. United States and Students for Fair Admissions v. Harvard, to support its argument.
However, legal scholars argue that the proposed rule is likely illegal and lacks authority. If the rule is implemented, it could lead to skyrocketing tuition bills, reduced funding from donors, and increased legal costs for affected schools.
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