Congress Delivers Full-Year Science Funding, Easing Fears for NIH and NSF Grants

Congressional Deal Quiets Fears of Science Funding Disruption — For Now

It was a winter of deep anxiety for America’s research community, as threats of budget clawbacks, government shutdowns, and a swirl of new federal priorities collided right at the heart of the grant cycle. But on February 3, 2026, Congress passed a sweeping bipartisan spending package ensuring full-year funding for critical agencies like the NIH, NSF, and the Department of Energy Office of Science—delivering a long-awaited reprieve to researchers, universities, and small business innovators.

Record Grant Activity Amid Last Year’s Chaos

The past year tested the resilience of U.S. institutions like never before. Federal workforce reductions slowed every piece of the grant lifecycle, from reviews to post-award modifications. A government shutdown in October 2025 brought new awards to a standstill, and shifting agency priorities forced researchers to rewrite proposals on the fly. According to UNC-Chapel Hill, their faculty still managed a record 6,011 grant submissions in 2025. Yet, this creative determination was matched by deepening uncertainty: canceled or reprogrammed awards, backlog in peer reviews, and an unsettled Facilities & Administrative (F&A) cost landscape kept the entire ecosystem off balance.

Modest Increases, Hard-Won Stability for NIH, NSF, and DOE

The new bipartisan legislation secures full-year funding through September 30, 2026, covering 11 of 12 appropriations bills—including the high-stakes Labor-HHS-Education bill (source: APLU). This means no new cuts for NIH, NSF, NASA’s science programs, or basic DoD research. Instead:

• NIH gets a modest bump to a $47.216 billion base budget, with $1.5 billion for ARPA-H, $3.9 billion for Alzheimer’s, $7.4 billion for the National Cancer Institute, and $2.3 billion for diabetes and kidney research. Rare diseases get a $19 million increase.
• NSF and DOE Office of Science both see slight increases (exact figures pending), directly rejecting White House budget proposals to slash their funding.
• NIH multiyear grant funding is capped at FY25 levels—a curb on expansion, but far better than the sweeping reductions many feared.

The bill explicitly protects negotiated F&A reimbursement rates (indirect costs), banning unilateral caps that could have destabilized institutional planning and mid-award administration. Though modernization of the F&A model (notably the FAIR proposal) wasn’t enacted, Congress signaled it as a top reform for FY27 appropriations or standalone legislation.

Grant Seekers Can Breathe Easier, But Challenges Remain

For research institutions, nonprofits, and small businesses, the passage of this package stabilizes funding landscapes for the coming fiscal year. Investigators writing NIH, NSF, and DOE grant proposals can now base budgets on known parameters: there won’t be last-minute cuts or restricted indirect cost rates.

• Pending proposals are likely to move forward without catastrophic delays (barring further shutdowns—see below), and multiyear awards aren’t threatened by surprise agency clawbacks.
• Small businesses leveraging SBIR/STTR grants can confidently plan their timelines, as the core science agencies have dodged major turbulence.
• Nonprofits and institutions serving vulnerable populations will also benefit from the HUD program's $7.2 billion increase, with the rental assistance and homelessness grants shielded from threatened cuts.

However, investigators should remain aware:

• NIH’s modest budget growth means paylines—the percentage of proposals funded—will stay highly competitive.
• The F&A landscape is stable for now, but the FAIR model will likely return to congressional debate in 2027, making institutional advocacy (and attention to future Federal Register notices) critical.
• All research stakeholders must be prepared for renewed instability if budget disputes or shutdowns resume, especially as Department of Homeland Security (DHS) funding remains unresolved (and another lapse could block new awards again).

What’s Next for Federal Research Funding?

This deal buys time but does not solve the structural problems facing U.S. research funding. Fiscal watchdogs note a $5.45 billion Pell Grant shortfall for 2026, underscoring the zero-sum nature of flat federal budgets. NIH’s multiyear grant cap, while less damaging than a cut, keeps overall investment close to flat after inflation. Groups like APLU and AAU warn that without more aggressive growth in research appropriations, the nation’s innovation edge is at risk.

Researchers should:

• Act quickly on FY26 grant opportunities—funding is available and proposal timelines should hold steady over the next several months.
• Monitor agency policy signals on indirect costs (F&A), as the FAIR model’s momentum could spur changes for FY27 and beyond.
• Prepare for another round of legislative advocacy on research budgets, especially as Congress revisits both appropriations and the F&A system.

Negotiations for DHS funding resume in late February—and any failure there could ripple back into agency operations. For now, though, American science breathes a cautious sigh of relief.

For everyone navigating this evolving federal landscape, tools like Granted AI can help you forecast changes and prepare stronger, more competitive proposals for what’s next.