The Trump administration has suspended approximately $175 million US in federal funding for the University of Pennsylvania over the participation of a transgender athlete in its swimming program, the White House said Wednesday.

The Ivy League school has been facing an Education Department investigation focused on its swimming program. That inquiry was announced last month immediately after U.S. President Donald Trump signed an executive order intended to ban transgender athletes from competing in girls and women's sports.

However, the federal money that was suspended came from a separate review of discretionary funding for universities, the White House said. It came from the Department of Defence and the Department of Health and Human Services.

A Penn spokesperson said the school had not received any notification or details of the action.

"It is important to note, however, that Penn has always followed NCAA [National Collegiate Athletic Association] and Ivy League policies regarding student participation on athletic teams," spokesperson Ron Ozio said.

"We have been in the past, and remain today, in full compliance with the regulations that apply to not only Penn, but all of our NCAA and Ivy League peer institutions."

The investigation at Penn, opened by the Education Department's Office for Civil Rights, focuses on Lia Thomas, who swam on the school's women's team and was the first openly transgender athlete to win a Division I title in 2022.

The agency also opened reviews of San Jose State University volleyball and the Massachusetts Interscholastic Athletic Association.

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