This bill changes how colleges and universities are accredited by preventing accrediting agencies from considering race, color, sex, or national origin when evaluating schools. Accrediting agencies are organizations that certify whether colleges meet quality standards—this certification is important because it affects federal funding and student aid eligibility.

The bill adds new rules stating that accrediting agencies cannot require schools to meet diversity standards, cannot investigate or make recommendations based on the racial or gender makeup of students, faculty, or staff, and cannot consider these factors when deciding whether to accredit an institution. Schools would be allowed to adopt any lawful policy they want regarding these demographic factors, regardless of their stated mission.

The bill also requires accrediting agencies to ensure 'free inquiry' at colleges—meaning public universities must follow the First Amendment and their own academic freedom policies, while private universities must follow their own written policies on free speech and academic freedom. However, religious colleges and universities are exempt from these free inquiry requirements if they meet certain criteria, such as being controlled by a religious organization or requiring students and faculty to follow religious practices.

If an accrediting agency denies or withdraws accreditation because a school violates these new rules, the school can sue the accrediting agency in federal court.