Trump’s Anti-DEI Tax-Exempt Status Threat Includes Private HBCUS

By Cash Michaels –

In an effort to further stamp out DEI (diversity, equity, and inclusion) policies in the nation’s higher education, private historically Black colleges and universities that in any way maintain admissions policies, scholarships, loans, or other programs for students of color could lose their tax-exempt status under a new proposed rule by the Trump Administration because they “engage in racial discrimination.”

In North Carolina this would affect Shaw University in Raleigh; Bennett College for Women in Greensboro; Johnson C. Smith University in Charlotte, Livingstone College in Salisbury; and St. Augustine’s University in Raleigh.

Overall, at least 18,000 private schools and colleges could now be affected by a draft proposal that was released last week by the US Treasury and the Internal Revenue Service. Under this proposal, private schools K-12 and post-secondary institutions that are found to be discriminating—against whites!—on the basis of race, color, or national or ethnic origin in administration of its educational , admissions, scholarships, athletic, or other policies, could have their 501(c)3 tax-exempt status revoked.

Reportedly, the Treasury Department estimates at least 750,000 students attending private schools across the country may be enrolled and “qualify for scholarships allocated on the basis of racial, ethnic or national identity.”

The proposed rule has not gone into effect but is slated to do so May 31, 2027. But once it does, those private schools, if found to be in violation, will lose their tax-exempt status, meaning they will then be subject to federal income tax, and donations to those institutions will no longer be tax deductible.

HBCUs, in addition to other “minority-serving institutions,” will be affected, most observers note.

“Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature. Today’s Treasury and IRS proposed regulations establish a clear standard, and the institutions that continue to use discriminatory practices will no longer receive the benefits of federal tax-exempt status,” said Treasury Secretary Scott Bessent. “Under President Trump, this Administration is standing up for America’s students by ensuring racial discrimination has no place in American education.”

Interestingly, the proposal would not affect private institutions that have a religious mission or curriculum. Religious affiliations would remain tax-exempt under the proposed policy.

Critics were not pleased with the proposal.

“This is not neutral enforcement ‌of civil-rights law. It is an affirmative attempt to turn civil-rights law against the very people it was enacted to protect,” AAUP President Todd Wolfson said in a statement. “For half a century, federal policy recognized that measures intended to dismantle entrenched racial exclusion are not equivalent to policies designed to preserve it.”