The Treasury Department and Internal Revenue Service proposed regulations that would strip private schools, colleges and other institutions of federal tax-exempt status if they consider race in admissions or any school-administered programs, including scholarships, loans, athletics and educational policies. Officials said the rules would reach race-based practices for any purpose, including efforts framed as equity or diversity, and estimated they could affect as many as 18,000 schools and about 750,000 students who may qualify for race-based scholarships, with changes applying to taxable years beginning on or after May 31, 2027. Schools could still use race-neutral criteria such as family income, geography, first-generation status, individual hardship, military family status or academic achievement, and religious schools could continue selecting students by religious affiliation. Senate Minority Leader Chuck Schumer condemned the broader Trump administration education agenda as defunding, radicalizing and dismantling American schools and said Democrats will keep fighting for every child’s access to a good education, while the American Association of University Professors said it is considering litigation. The proposal extends pressure on diversity policies already seen in funding freezes and tax-exemption threats aimed at institutions such as Harvard and sits alongside steps to shrink the Education Department and shift civil rights, student privacy and special education functions to other agencies.