What to know about the University of Pennsylvania’s fraught funding

The University of Pennsylvania has joined the ranks of major colleges and universities facing fraught financial situations as the Trump administration continues to expand its policy of withholding federal funding from universities carrying out policies it deems inconsistent with its priorities. 

Penn, which came under fire last year for former President Liz Magill’s lack of commitment to the safety and security of both Jewish and Muslim students and the campus reaction to protests around the Israel-Hamas War, is among several schools targeted by the Trump administration.  The campus was also roiled in late 2023 by a conference on Palestinian culture that featured a number of speakers accused of antisemitism.

With funding in flux – and the reasoning behind the repeal being questioned – Penn and the state’s higher education institutions will have to crunch some numbers to figure out a feasible financial path going forward. 

Here’s what to know: 

Federal funding pulled

Earlier this week, the White House announced it paused $175 million in federal funding to Penn for, according to the administration, allowing transgender athlete Lia Thomas to compete on the women’s swimming team during the 2021-22 season. 

The funds, tied to the Department of Health and Human Services and the Department of Defense, make up about a fifth of the federal funding received by Penn annually. 

Following the announcement, a Penn spokesperson said it has not received any official notice of a suspension of funds and that the school was following NCAA guidelines. 

“It is important to note, however, that Penn has always followed NCAA and Ivy League policies regarding student participation on athletic teams,” a Penn spokesperson said. “We have been in the past, and remain today, in full compliance with the regulations that apply not only to Penn, but all of our NCAA and Ivy League peer institutions.”

Officials haven’t revealed which funds the Trump administration is specifically targeting and what they are used for. The administration has been vocal about its opposition to allowing transgender athletes to compete in female sports, with the federal Department of Education – the agency Trump ordered to be dismantled on Thursday – announcing in February that it wanted all records, titles and awards that went to transgender female athletes to be restored to cisgender women. 

And on Feb. 5, Trump signed an executive order banning transgender athletes from women’s sports, and the federal Education Department subsequently opened an investigation into Penn over reported “violations of Title IX” in athletics.

The White House has said the funding pause is not the result of the Education Department investigation.

Meanwhile, Penn is already facing fiscal uncertainty after a Trump order that looks to cut $250 million in research funding from the National Institutes of Health. Penn receives about $1 billion annually in federal funding, with $693.6 million coming from the Department of Health and Human Services and nearly $52.2 million coming from the Department of Defense in 2024. 

Campus response

Amid the uncertainty on-campus, staff, faculty and students have made their voices heard – and shared stories about the broad impacts federal funding cuts could have on research institutions like Penn. 

Thursday afternoon, more than 200 members of the Penn community rallied in protest of the federal actions, expressing concerns about academic freedom and Penn leadership’s response. 

“Penn cannot stand by its ‘enduring values and principles of academic freedom’ if its students and staff are too afraid of punitive action to exercise their freedom of speech or even go about their daily lives,” Penn Museum employee Cristina Juarez said at the rally. 

“The threat to withhold federal funding is an attempt to intimidate the university administration into throwing our students and our colleagues under the bus,” said Amy Offner, president of Penn’s chapter of the American Association of University Professors, which organized the protest. “Penn should not take the bait.”

In response to the protest, Penn spokesperson Ron Ozio said the university does not comment on students’ and staff’s ability to exercise their First Amendment rights.

Elected officials have chimed in as well. Philadelphia City Councilmember Jamie Gauthier, whose district includes Penn, called the freezing of funds a “deplorable decision.”

“These funds have nothing to do with transgender student-athletes – this is nothing more than a hollow pretext to target our community,” Gauthier said in a statement.

And several local lawmakers – including state Rep. Rick Krajewski and state Sens. Anthony Williams and Nikil Saval – spoke at Thursday’s rally, calling for the Penn community to remain united and for the school to “demonstrate bold leadership.” 

“Penn must act with decisiveness and it must act with courage because what happens here is not isolated to just this campus,” Krajewski said. “The entire country is watching to see who is willing to check the power of this administration.” 

Petition posted

With the cuts to federal funding and a campus community demanding action, Penn and its administrators find themselves in a precarious position. 

Following the protest, Offner led a group of organizers to College Hall, where they delivered a printed copy of a petition with roughly 1,200 signatures to administrators. 

The petition demands that the Penn administration support research and counteract federal funding cuts, and uphold its 2016 sanctuary policy and the rights of immigrant faculty, staff and students. Additionally, it demands that there be no anticipatory obedience on diversity, equity, inclusion, and accessibility, and no censorship of programs addressing these goals, and that the university and its healthcare system maintain equal treatment for transgender and LGBTQ+ members of the Penn community.