White House Plans to Pause $175 Million for Penn Over Transgender Policy

On Wednesday, the Trump administration announced plans to withhold approximately $175 million in federal funding from the University of Pennsylvania due to its stance on transgender athletes. This decision, shared via a White House social media account, represents an escalation in the administration’s broader efforts to restrict transgender participation in public spaces and intensifies its ongoing conflict with elite universities.

The White House’s rapid response account on X cited Penn’s “policies forcing women to compete with men in sports” as the justification for the funding suspension. A source familiar with the matter, speaking anonymously due to the lack of an official announcement, confirmed the decision. They pointed to Penn’s previous support of Lia Thomas, a transgender woman who competed on the university’s women’s swim team, as a key factor in the move.

Penn issued a statement acknowledging media reports about the potential suspension but clarified that it had not yet received any formal notification or specific details from the government. The university emphasized its full compliance with all applicable regulations, aligning with the standards followed by other NCAA and Ivy League institutions.

Penn, the alma mater of President Trump, is the second Ivy League school in recent weeks to face direct action from the administration. Earlier this month, the government suspended approximately $400 million in funding to Columbia University, citing concerns over its handling of antisemitism on campus. Last week, U.S. officials provided Columbia with a set of conditions that must be met before discussions on reinstating funding can take place.

Beyond these high-profile cases, the administration has launched federal investigations into numerous other schools while implementing widespread budget cuts. The pressure extends to K-12 education as well; on Wednesday, the U.S. Department of Education warned Maine officials that their federal funding was at risk due to the inclusion of transgender athletes in girls’ and women’s sports.

The decision to cut Penn’s funding, first reported by Fox Business, comes nearly three years after Lia Thomas won an NCAA championship in the 500-yard freestyle. Prior to her victory, several Penn swimmers anonymously voiced concerns to university and Ivy League officials, arguing that Thomas had an unfair competitive advantage. While acknowledging her talent as a top-tier athlete, they asserted that her success in women’s competitions resulted from advantages she would not have had competing as a male athlete.

Thomas has since graduated, and a ruling from the international swimming federation barred her from competing for a spot on the U.S. Olympic team. She was unavailable for comment on Wednesday, and her attorney did not respond to inquiries.

The controversy surrounding her time at Penn has remained a focal point in political discourse, particularly after Trump made transgender participation in sports a central issue in his campaign.

In February, just one day after three former Penn swimmers filed a lawsuit against the university over Thomas’s participation, Trump signed an executive order stating that the U.S. would revoke funding from educational institutions that “deprive women and girls of fair athletic opportunities.” The following day, the Department of Education announced an investigation into Penn’s potential violations of Title IX, quoting Penn swimmer Paula Scanlan, who said she had been “forced to compete against and share a locker room with a male athlete.”

Shortly after, The Daily Pennsylvanian reported that Penn’s athletic department removed a webpage detailing its diversity, equity, and inclusion policies, which had outlined its approach to transgender participation in sports.

Trump’s executive order also prompted the NCAA to adopt a policy barring transgender women from competing in women’s events, affecting collegiate athletes nationwide.

Financially, Penn was already preparing for potential funding challenges. The university previously warned that proposed changes to National Institutes of Health (NIH) funding could cost it around $240 million annually. If additional federal agencies follow suit, the university estimates the losses could reach $315 million per year.

In response to these financial uncertainties, Penn recently announced hiring and salary freezes, alongside a review of capital projects and faculty recruitment.

“The magnitude and speed of the potential disruptions we face could surpass those of past crises, including the 2008 financial downturn and the Covid-19 pandemic,” Provost John L. Jackson Jr. and Senior Executive Vice President Craig R. Carnaroli wrote in an open letter outlining these measures.

A source familiar with the administration’s decision emphasized that the funding cuts were not directly linked to the Department of Education’s investigation into Penn. Instead, they were described as a proactive effort to reassess discretionary funding allocations, suggesting that further reductions could follow.

The administration has yet to specify which Penn programs will lose funding, but any cuts related to medical research could significantly impact the university, given its extensive hospitals and laboratories. In recognition of Penn’s focus on medical sciences, the university’s trustees recently appointed endocrinologist J. Larry Jameson, the former medical school dean, as Penn’s new president.

With an endowment of roughly $22 billion, Penn relies on these funds to cover about 20% of its operating budget. However, university officials have noted that filling the gap left by federal funding losses is not as simple as drawing from endowment reserves. Universities across the country are now evaluating how long they can sustain key projects without federal support.

At Columbia, dozens of scientific research projects face shutdowns after the NIH announced the termination of over 400 grants. Meanwhile, Johns Hopkins University, which has a $13 billion endowment, recently announced the elimination of more than 2,000 jobs tied to federal funding.

Penn now finds itself navigating similar financial uncertainty as it braces for the broader impact of the administration’s actions.