Ransom Everglades School could lose its federal tax-exempt status under a proposed rule targeting private schools with DEI policies. The Coconut Grove prep school, popular with Key Biscayne families, faces direct consequences if the regulation takes effect.
The U.S. Department of the Treasury and the Internal Revenue Service (IRS) proposed the regulation Sept. 3, according to The Center Square. If finalized, it would take effect May 31, 2027, and could affect as many as 18,000 private schools, colleges and universities nationwide.
The rule would strip Section 501(c)(3) status from any private school that adopts or enforces a policy that discriminates based on race and color. It covers admissions, scholarships, athletics and educational programs.
School's DEI Programs Span Admissions, Curriculum
Ransom Everglades' policies touch several of those areas. The school's website describes diversity, equity and inclusion (DEI) as informing its "curriculum, community outreach, co-curricular activities and admission process." The school maintains a DEI Committee of the Board of Trustees, a school-level DEI Committee and a director of inclusion and community engagement. Sixty-four percent of its 1,246 students identify as multicultural.
The school also operates a dedicated "Fund for RE & Diversity, Equity and Inclusion" that accepts donor gifts to support DEI programs.
Financial Aid and Fundraising Could Take a Hit
Losing tax-exempt status would not necessarily mean the school owes significant federal income taxes, NPR reported. The bigger hit would land on fundraising. Donors could no longer deduct contributions, threatening the $8.5 million Ransom Everglades distributes annually in financial aid and tuition remission. That money supports 17% of the student body, with an average grant of $39,942. Tuition for 2026-27 is $57,300.
Marjorie Hass, president of the Council of Independent Colleges, told NPR the change would most likely hurt donations, which are often earmarked for scholarships.
Treasury Secretary Scott Bessent framed the rule differently. "Schools rebranding race-based preferences as equitable, inclusive, or diversity-enhancing does not change their discriminatory nature," Bessent said in a Sept. 3 statement.
Higher Education Leaders Push Back Against Rule
Higher education leaders have pushed back. Mike Gavin, president and CEO of the Alliance for Higher Education, called the rule changes the administration's "most blatant attack" on access to higher education for working-class Americans and people of color.
Tim Powers, vice president of the National Association of Independent Colleges and Universities, told NPR the rule may create new compliance burdens and legal uncertainties even for schools already following existing nondiscrimination rules.
The only notable precedent is Bob Jones University in South Carolina, which lost its tax exemption in the 1970s over a ban on interracial dating. The Supreme Court upheld that decision. The school ended the ban and regained its exemption in 2017.
Ransom Everglades Has Yet to Comment
Ransom Everglades has not publicly responded to the proposed rule. In an Oct. 14, 2024, school publication, James G. Weaver Jr. '90, then chair of the Board of Trustees' DEI Committee, wrote that the school "remains committed to the ultimate focus of DEI: an inclusive community where everyone is safe, belongs and is able to thrive."
The proposed rule is open to public comment, though no deadline has been published.
