Colleges Face ‘Existential’ Threat in Proposed IRS Rules on Race

The Trump administration is privately considering unleashing what advocates and critics agree would be one of its biggest cudgels yet to pressure colleges to end slews of programs and practices benefiting students who are racial minorities.

The Treasury Department is weighing a change to Internal Revenue Service policies to allow the revocation of tax-exempt status for colleges that consider race in student admissions, scholarships and other areas, Bloomberg News reported last week.

If enacted, it would take the administration’s reshaping of higher education well beyond the public battles with Harvard University and Columbia University. Nonprofit status is core to the ...