# US administration education and tax policy changes > Live situation record from CLSTR: https://clstr.news/situations/us-administration-education-and-tax-policy-changes > Updated: 2026-09-07T04:43:16.000Z. Sources: 45. Developments: 4. The Trump administration has introduced several regulatory changes affecting educational institutions and federal data reporting. The Treasury Department and the IRS have proposed regulations that could revoke the federal tax-exempt status of up to 18,000 private schools, colleges, and universities. These proposals target institutions that utilize race, color, or national or ethnic origin in admissions, scholarships, athletics, or other programs, arguing that such policies discriminate against white and Asian American students. Treasury Secretary Scott Bessent and IRS CEO Frank Bisignano have framed the proposal as a measure to eliminate racial discrimination. Bessent has stated that institutions cannot avoid these rules by “simply rebranding race-based preferences as diversity or inclusion programs.” Citing Supreme Court precedents such as Bob Jones University v. United States and Students for Fair Admissions v. Harvard, the administration aims to target diversity, equity, and inclusion (DEI) initiatives. The proposed rules would apply to tax years beginning after May 31, 2027, and would not apply to religious institutions maintaining religious curricula or to assistance based on race-neutral factors like income or academic achievement. Under the proposed standards, any policy intended to promote diversity or remedy past discrimination through race-based treatment would be classified as discrimination. This would eliminate existing IRS guidance that allows certain preferences for minority groups to advance nondiscriminatory policies. Critics and higher education leaders have expressed concern that the tax proposals could impact school fundraising by removing the tax-deductibility of donations and may hinder access to education for people of color. Specifically, advocates note that an estimated 750,000 students could lose access to race-based scholarships. Simultaneously, the administration has altered federal education oversight. Following an executive order defining sex as strictly male or female, the U.S. Department of Education updated its Civil Rights Data Collection for the 2023-2024 school year. ## Claims - The Treasury Department and the IRS are expected to roll out regulations to end federal tax-exempt status for private schools that discriminate based on race. (corroborated by 20 sources) - The proposed rule could affect as many as 18,000 private schools, colleges, and other educational institutions. (corroborated by 20 sources) - The IRS and Treasury cited Supreme Court precedents including Brown v. Board of Education, Bob Jones University v. United States, and Students for Fair Admissions v. Harvard. (corroborated by 10 sources) - The proposal allows private schools to maintain certain curricula and observances based on genuine religious affiliation. (corroborated by 8 sources) - If finalized, the new regulations would apply to tax years beginning after May 31, 2027. (corroborated by 8 sources) - Schools may still use race-neutral criteria for assistance, such as income, geography, hardship, military status, or academic achievement. (corroborated by 8 sources) - A DOJ review found race-based discrimination in admissions at Yale University School of Medicine, George Washington University School of Medicine and Health Sciences, and Duke University School of Law (corroborated by 5 sources) - Losing tax-exempt status would prevent donors from deducting contributions made to schools, impacting fundraising. (corroborated by 2 sources) - The Treasury Department has proposed regulations to revoke tax-exempt status from private schools that use race in admissions, scholarships, or other programs. (single source) - The proposed regulations exclude schools that select students based on religion. (single source) - Roughly 750,000 students could lose access to race-based scholarships due to these changes. (single source) ## Timeline ### 2026-09-07: Treasury proposes revoking tax-exempt status for race-based school aid The U.S. Treasury and IRS proposed rules that could revoke the tax-exempt status of 18,000 private schools and universities if they use race-based criteria for admissions, scholarships, or aid. 7 sources. https://clstr.news/cluster/treasury-proposes-revoking-tax-exempt-status-for-race-based-school-aid ### 2026-09-05: Treasury Department proposes revoking tax-exempt status for schools using race-based aid The Treasury Department has proposed rules to revoke the tax-exempt status of private schools and colleges that use race in admissions or scholarship programs, effective May 2027. 14 sources. https://clstr.news/cluster/treasury-department-proposes-revoking-tax-exempt-status-for-schools-with-race-targeted-aid ### 2026-09-03: Trump administration implements changes to school data and tax status The Trump administration has suppressed gender identity data in federal school civil rights surveys and proposed rules that could strip tax-exempt status from schools using race-based policies. 2 sources. https://clstr.news/cluster/trump-administration-implements-changes-to-school-data-and-tax-status ### 2026-09-03: US Treasury proposes revoking tax exemptions for schools with race-based policies The Trump administration has proposed rules to revoke the tax-exempt status of up to 18,000 private schools and universities that use race-based policies in admissions or scholarships. 22 sources. https://clstr.news/cluster/treasury-and-irs-to-target-discriminatory-private-schools --- Cite as: US administration education and tax policy changes. CLSTR, https://clstr.news/situations/us-administration-education-and-tax-policy-changes