[REVISION HISTORY]

US administration education and tax policy changes

Updated 3 times since CLSTR started tracking revisions of this situation.

What changed

2026-09-06 04:10 UTC → 2026-09-07 12:11 UTC · added ~~removed~~

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. ~~This update omits data regarding nonbinary students and bullying based on gender identity, replacing relevant columns with the notation, “Suppressed in Compliance with Executive Order.”~~

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