Seton Hall’s tax-exempt status is at risk, as the Trump administration aims to eliminate diversity, equity, and inclusion (DEI) policies and programs at private universities.
The Treasury Department proposed the legislature, which strives to remove the tax-exemption status of private universities that provide targeted help to students based on race or origin, on Sept. 3. Under Section 501 (c) (3) of the Internal Revenue Code, private universities have tax-exempt status because they provide educational services and serve the public.
The Trump administration argues that scholarships or admission to universities based on race directly oppose their efforts to eliminate diversity programs, claiming they are discriminatory towards white and Asian American students. The Treasury Department and Internal Revenue Service (IRS) estimate this could affect over 18,000 institutions, with the legislation taking effect in May 2027.
SHU, a private non-profit institution, offers a variety of scholarships for students of specific ethnic groups, nationalities or religions. Scholarships such as the Native American Scholarship Fund, Islamic Scholarship Fund, Hispanic Scholarship Fund, American Indian College Fund scholarships and United Negro College Fund scholarships, put the university at risk of losing its tax-exempt status under the proposed legislation.
Other diversity scholarships offered by SHU include the Lighthouse International Scholarships for students with specific medical conditions, the Soros Fellowship for New Americans, Ford Foundation Diversity Fellowships, the Kayal Scholarship for Arab American Students in Social Sciences and Nurse Journal Financial Aid for Minority Students.
Leaders in higher education have spoken out against this policy change, and institutions have adjusted how they frame diversity, equity and inclusion policies as a result.
At SHU, students are raising concerns about how the regulations could affect access to education, while university administration says they remain dedicated to diversity.
Aadit Sivakumar, a senior biology major, said he was surprised by the potential influence federal tax policy could have on university operations and scholarship funding.
“What strikes me is how much leverage tax policy gives the federal government over how universities operate internally,” Sivakumar said. “It's not a direct ban, but using the tax code this way effectively forces schools to choose between their funding model and their own institutional values.”
Sivakumar said race-conscious programs have a history rooted in unequal access to higher education and believes these scholarships and programs are important to maintain equality.
“Race-conscious programs also didn't come out of nowhere,” Sivakumar said. “They are here because access to higher education in this country has a hugely documented history of being unequal.”
While Sivakumar believes in the university’s commitment to diversity, he questioned whether the university will be able to maintain that commitment under increased federal pressure.
“I am curious, however, if that commitment will hold up under more external pressure,” Sivakumar said. “I think it’s one thing to support equal access when it costs nothing, and another to advocate for it when there’s a financial penalty attached.”
That concern over maintaining access to educational opportunities was shared by other students.
Mark Domingo, a junior exercise science major, emphasized the importance of DEI scholarships, especially for students who rely on financial assistance to continue their education.
“It just seems like they're stripping away a lot of DEI-related scholarships, which are important, and they help a lot of students,” Domingo said. “For me, I always see and check for scholarships.”
For Domingo, the potential impact extends beyond the scholarships themselves to the students who depend on financial aid to remain in school.
“It is sad because you know the United States is like a melting pot of all different people of different races,” Domingo said. “The fact that they're…stripping away these scholarships and any financial aid towards these communities is really sad.”
Leo Oredia, a sophomore biochemistry and psychology major, also expressed concern that the proposed legislation could take opportunities away from students.
“I feel like that's an incredibly silly decision to do,” Oredia said. “I'm not really sure why that would be needed or what help it would provide to anyone.”
Other students connected the proposed changes to broader efforts to alter DEI policies at universities.
Isabel Gevera, a junior accounting major, was not familiar with the proposed changes but noted other instances in which the Trump administration tried to change DEI policies at universities.
“I know they [removed] a lot of the DEI policies in place,” Gevera said. “I believe a year or two back at Harvard University.”
As Gevera mentioned, in April 2025, the Trump administration ordered Harvard University to remove its DEI programs amid an investigation into the university for allegations of antisemitism. Since the investigation, the federal government has worked to eliminate all DEI programs as part of a broader mission to change college admissions standards.
Despite the proposed federal change, Dr. Monica Burnette, vice president of Student Services, and Lori Brown, chief equity, diversity and compliance officer, said SHU continues to provide accessible aid for all students in accordance with the university’s Catholic mission.
SHU has adopted “Campus Belonging and Community” to encompass inclusion, student support, and community formation, Burnette and Brown said.
“Seton Hall University annually provides approximately $170M in financial aid and scholarships,” Burnette and Brown said. “This reflects our commitment to making a Seton Hall education accessible and affordable.”
SHU continues to offer scholarship opportunities for minority communities aimed at providing students with financial assistance and greater access to educational opportunities.
“Further, we offer a wide array of student support services to assist students in their educational journey, providing pathways for their academic success and overall well-being,” Burnette and Brown said.
Regarding the impact of the proposed federal changes on students, Burnette and Brown said university officials will ensure students continue to have opportunities for academic success.
“We continue to monitor the various legislative proposals in Washington and Trenton affecting higher education and are in contact with government officials to ensure Seton Hall’s interests remain well represented and supported,” Burnette and Brown said.
Students, like Cassandra Horn, a senior biology major, said they appreciate the university’s dedication to diversity and inclusion.
Although Horn was not aware of the proposal, she believes “all students should have access and opportunity to apply for and obtain scholarships.”
Horn added that SHU’s commitment to diversity-related scholarships is honorable and ultimately reflects the university’s values.
Similarly, Oredia said SHU’s commitment to diversity amid these proposed changes reflects the strength of the university’s mission to develop student leaders.
“I think they're keeping that idea of servant leadership really strong,” Oredia said. “The fact that they're…not appealing to this new policy and sticking strong to what they believe in is really uplifting to students.”
Grace Tylee is the head editor of The Setonian’s Social Media. She can be reached at grace.tylee@student.shu.edu.
