Trump Tax Proposal Could Put Race-Based Scholarships and Student Programs Under Scrutiny in Oregon

The Trump administration introduces new federal rules around tax exemptions that could put some programs designed to support students of color under scrutiny, including at private colleges in Oregon.

New Federal Rule Targets Race-Based Policies

Up to 18,000 educational institutions (including private schools, colleges, and universities) across the country could be affected by new regulations.

The Treasury Department and Internal Revenue Service (IRS) new rule would make private educational institutions that discriminate on the basis of race, color, or national or ethnic origin ineligible for federal tax-exempt status.

Under the proposed regulations, race could no longer be used to determine admission, scholarships, financial assistance, athletics, or other school-administered programs at tax-exempt private institutions.

According to the federal agencies, these changes would establish a uniform nondiscrimination standard, bringing federal tax guidance into line with Supreme Court decisions such as Brown v. Board of Education, Bob Jones University v. United States, and Students for Fair Admissions v. Harvard.

Schools would still be able to assist disadvantaged students, but using race-neutral criteria such as family income, geographic location, first-generation status, or individual hardship. The rule would apply to tax years beginning after May 31, 2027, if the rules proceed.

Oregon Programs Could Face Review

The proposal could have implications for Oregon’s private, nonprofit colleges, including members of Oregon Alliance of Independent Colleges and Universities (OAICU), which represents institutions including Reed College and the University of Portland.

One example is Reed’s Senior Scholars program. The college says the program is designed to address questions from underrepresented students and students of color, with admitted students receiving financial support to visit campus.

However, Reed also explicitly states that all high-achieving seniors, regardless of background, race, ethnicity, or gender, are welcome to apply.

That distinction could become important if the federal proposal becomes final. The rule would not necessarily eliminate programs aimed at expanding opportunity for underrepresented students, but colleges may need to examine whether race plays a role in eligibility or benefits.

For Oregon’s private colleges, the question may therefore be less about whether they can continue supporting disadvantaged students- and more about how those programs are structured.