Higher Education Groups Condemn Proposed Rule Threatening Private College Tax Exemptions

Higher education advocacy groups and institutions are criticizing a proposed Treasury Department and IRS rule that could revoke the tax-exempt status of private, nonprofit colleges found to discriminate based on race or ethnicity. Colleges argue the rule is unclear and unlawful, fearing it could undermine institutional financial stability and deter donors. The IRS states the regulation would consider “all forms of racial discrimination in education” as grounds for losing tax exemption.