U.S. Treasury Secretary Scott Bessent is endorsing a plan, in the works as a proposed rule, that would remove the lucrative tax-exempt status for private schools that continue to push the discriminatory DEI agenda.
That’s “Diversity, Equity and Inclusion” and often is the basis for racial discrimination.
“Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature,” Bessent charged.
His department is accusing schools that use race-based DEI policies of violating federal public policy against racial discrimination.
A report from the Washington Examiner said the proposed regulations are part of efforts by the administration of President Donald Trump to remove those schemes from institutions and organizations taxpayers support.
“These proposed regulations would provide that all forms of racial discrimination in education, regardless of the intent behind or the legality of such discrimination (for example, where such discrimination is defended as serving remedial or diversity-related objectives) are against a fundamental public policy of the United States,” the proposal said.
The changes would be to Treasury and IRS guidance to reflect what the agencies described as that long-standing principle, citing Supreme Court decisions Brown v. Board of Education, Bob Jones University v. United States, and Students for Fair Admissions v. Harvard College.
Treasury, IRS Move to End Tax-Exempt Status for Discriminatory Practices in Private Schoolshttps://t.co/RqJphpdXrj
— Rapid Response 47 (@RapidResponse47) September 3, 2026
It would turn IRS allowances for private schools to consider race in admissions, facilities, programs and more into a banned practice.
However, the rules note that the changes would not restrict freedoms for schools with religious missions. The plan would let private schools maintain religious missions, curricula, or programs of religious observance, while also selecting students based on genuine religious affiliation or membership, the report said.
The replacement plans would be based on “race-neutral” criteria, the report said, such as “family income, geographic location, first-generation status, individual hardship, military family status, or academic achievement.”
