**Explanation:**

The correct answer is option **C) diversity**. Racial preferences in student admissions in the US are made on the argument of diversity. Here is a detailed explanation of this answer:

**1. Introduction:**
Racial preferences in student admissions refer to the practice of considering an applicant's race or ethnicity as a factor in the admissions process. This practice has been a topic of debate and controversy in the United States for many years.

**2. The Argument of Diversity:**
Advocates for racial preferences argue that diversity is a valuable and important goal in higher education. They believe that by considering an applicant's race or ethnicity, universities can create a more diverse and inclusive learning environment.

**3. Educational Benefits of Diversity:**
Proponents of racial preferences argue that diversity in student admissions brings several educational benefits. These benefits include:

- **Exposure to Different Perspectives:** A diverse student body can provide a wide range of perspectives and experiences that enhance the learning environment. It encourages students to engage in critical thinking, challenge their own beliefs, and develop a broader understanding of the world.

- **Promoting Cultural Competence:** Interacting with students from different racial and ethnic backgrounds helps develop cultural competence, which is essential in a diverse society. It prepares students to work and live in a multicultural world.

- **Breaking Stereotypes and Prejudices:** By fostering interactions between students of different races and ethnicities, racial preferences can help break down stereotypes and prejudices. It allows for greater understanding, empathy, and appreciation of diverse cultures and backgrounds.

**4. Affirmative Action and Diversity:**
Racial preferences in student admissions are often associated with affirmative action policies. Affirmative action aims to address historical inequalities and promote equal opportunities for underrepresented groups. It seeks to increase the representation of marginalized communities in higher education and other sectors.

**5. Legal Framework and Challenges:**
The use of racial preferences in student admissions has faced legal challenges. The Supreme Court has ruled that universities can consider race as a factor in admissions decisions but must do so within certain limits. The court has emphasized that diversity is a compelling interest in higher education but has also set restrictions on the extent to which race can be considered.

In conclusion, the case for racial preferences in student admissions in the US is made on the argument of diversity. Proponents believe that diversity brings educational benefits, promotes cultural competence, and breaks down stereotypes. However, it is important to note that this practice is subject to legal limitations and ongoing debates.