Congress Blocks NIH 15% Indirect Cost Cap in FY2026 Spending Deal
March 3, 2026 · 2 min read
Arthur Griffin
The Consolidated Appropriations Act signed February 3 includes explicit language blocking the Trump administration's proposed 15% cap on NIH indirect cost reimbursement rates — a policy that would have redirected billions from university research infrastructure.
The legislation goes further than a simple prohibition: it includes additional language aimed at preventing changes to negotiated indirect cost rates across all Department of Health and Human Services research agencies, extending protections beyond NIH to cover AHRQ, SAMHSA, and other HHS funders.
What Was at Stake
Indirect costs cover lab facilities, equipment maintenance, regulatory compliance, and administrative support for federally funded research. At major research universities, negotiated rates typically range from 40% to 70% of direct grant costs. The proposed 15% cap would have slashed reimbursements by up to 80% at some institutions, potentially forcing universities to subsidize federal research from tuition revenue or endowment funds.
The cap proposal had drawn bipartisan opposition from the research community, with the American Council on Education and major research university associations lobbying heavily against it.
The Bigger Budget Picture
The spending deal sets NIH's total discretionary budget at $48.7 billion, a $415 million increase over FY2025 — a bipartisan rejection of the administration's proposed 40% cut. The Department of Education received $79 billion, with the Institute of Education Sciences tripling the administration's request at $790 million. Pell Grants held at $7,395 maximum, and programs supporting HBCUs, Hispanic-Serving Institutions, and Tribal Colleges received continued or increased funding.
What Grant Applicants Should Know
Researchers and institutions preparing NIH applications can budget indirect costs at their established negotiated rates with confidence through FY2026. There is no need to restructure budgets around a lower cap.
However, the underlying policy debate is not settled. The administration could propose the cap again in future budget requests. Institutions should ensure their negotiated rate agreements are current and thoroughly document the full cost of research infrastructure — that documentation may prove essential in future legislative fights.
Detailed coverage of NIH funding policy is available on the Granted blog.