Trump administration pushes to remove tax exemption for private colleges with DEI policies

The proposal targets what the administration describes as diversity programs directed at Black, Hispanic, and other minority students. If finalized, the rule would take effect after May 2027, giving institutions roughly two years to adjust or lose their nonprofit status.

For Lubbock, the stakes are real. Texas Tech is a public university and sits outside the rule's current scope, but private colleges across the country would face a hard choice: dismantle programs that direct resources toward minority students or risk losing the tax protections that make their financial models work. Students who rely on race-targeted scholarships at private institutions could see those funds disappear.

The rule is the federal government's most direct financial threat yet to DEI programs, going beyond executive orders and funding freezes by attaching consequences to the tax code itself. Losing tax-exempt status would expose a private school's endowment income, donations, and property to federal taxation, a cost that could reshape how those schools operate entirely.

Private colleges nationwide now have to decide whether their existing programs cross the line the Treasury Department is drawing.