Proposed U.S. rule on race-based scholarships draws concern over impact on Haitian students

The Treasury Department and Internal Revenue Service have proposed a rule that would strip federal tax-exempt status from private schools that use race, color, or national or ethnic origin in scholarships, admissions or other programs. An education advocate says the change could hit Haitian-born college students especially hard.

The proposed regulations were released Sept. 3 and would deny 501(c)(3) status to any private school that considers race, color, or national or ethnic origin in any program or policy, including for remedial or diversity purposes. They were published in the Federal Register the next day.

Treasury and the IRS estimate the rule could affect as many as 18,000 private institutions, from elementary schools to universities and trade schools. The agencies also said the financial impact could reach some 750,000 students who may qualify for scholarships based on racial, ethnic or national identity.

Treasury Secretary Scott Bessent said in announcing the proposal that relabeling race-based preferences as equitable, inclusive or diversity-enhancing does not change their discriminatory nature. The agencies said schools could still help disadvantaged students using race-neutral criteria such as family income, geographic location, first-generation status, individual hardship, military family status or academic achievement.

Alejandra Vásquez Bauer, an education advocate with the nonprofit EdTrust, told The Haitian Times that the rule could disproportionately harm Haitian-born college students who have recently been left undocumented. She said the damage could begin before the rule is finalized, as schools scale back programs in anticipation of it. “It’s not a small policy change,” she told the outlet.

Vásquez Bauer also argued that income-based aid alone cannot replace race-conscious support, because it does not capture barriers that can depend on ethnic background or immigration history.

The Congressional Black Caucus, chaired by Rep. Yvette D. Clarke, D-N.Y., condemned the proposal and called for a court challenge. The caucus tied the issue to the Nov. 3 midterm elections, and Clarke said Democrats would work to hold the administration accountable if they retake the House.