Frustrated and conflicted w/ friends

So I’m an Arab-Latina who also happens to be a Muslim and I go to a predominantly white school. Myself and about three other kids are the only minorities and in general spend our time educating our fellow classmates that they’re being racist and to not say certain things. Well today some crazy shit happened so buckle your seatbelts because you’re in for a ride.

Today during break myself and a bunch of kids were playing ball tag. During the game a kid grabbed the ball and began walking towards a groups of about four of us. When my friend Sam saw this, he looked at me and told the other kid to aim for the “good” terrorist. When I heard this I just about lunged at him but another kid got in between us and prevented me from smacking the shit out of him. I proceeded to cuss him out in Spanish and then walked away to try and calm down. The guy almost made me cry and I’m seriously considering not talking to him anymore. This isn’t the first time he’s said some f*cked up things. Just a few weeks ago he said that it was “Muslim culture to bomb places”.

I ended up talking with him and telling him that what he said was so inappropriate and wrong. The school is asking me if I want to proceed with the harassment policy and get him in trouble. I said no, but I did want the superintendent to know what happened.

What would you guys do? Should I cut off our friendship or not?