A recent Education Week article highlights another significant development in the evolving legal landscape surrounding race-conscious educational programs. On September 3, the U.S. Department of the Treasury and IRS proposed regulations that would condition a private school’s federal tax-exempt status on refraining from discrimination based on race, color, or national or ethnic origin in admissions, scholarships, educational policies, athletics, and other school-administered programs.
The proposal would permit schools to continue considering race-neutral factors—including socioeconomic circumstances, geography, individual hardship, academic achievement, and first-generation status—in making admissions and financial-aid decisions. Importantly, these are proposed regulations, not yet final rules, and the federal rulemaking process provides an opportunity for public comment before any final regulations are issued.
For educational leaders, the proposal illustrates how rapidly the legal framework surrounding diversity and access initiatives continues to develop. Although the immediate focus is private educational institutions and their tax-exempt status, the broader lesson for schools is the importance of examining not simply the objectives of programs designed to expand educational opportunity, but also the criteria by which students become eligible to participate in or benefit from them. As this proposal proceeds through the regulatory process, careful attention to both its final language and subsequent legal developments will be essential.
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Private K-12 schools that give racial minorities preference in admissions and scholarships and other targeted supports would lose their status as tax-exempt nonprofits under newly proposed U.S. Treasury regulations released Sept. 3.
