On May 28, 16 states filed a joint lawsuit against the National Science Foundation (NSF), whose multi-billion dollar budget funds a significant share of research in the U.S., alleging that the agency’s cap on funding for research overhead and its mass cancellation of certain grants violate federal law.

The states involved include California, Colorado, Connecticut, Delaware, Hawai’i, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Washington, and Wisconsin. Of note, all but one of these states’ attorneys general are Democratic (Hawai’i’s AG, Anne Lopez, is nonpartisan). 

Catch Up Quick

On April 18, NSF announced that it is adopting new funding priorities in alignment with those of the Trump administration. On the same day, the agency began issuing termination notices for grants “not aligned with program goals or agency priorities.” These terminations include grants supporting “diversity, equity, and inclusion (DEI), environmental justice, and misinformation/disinformation,” but also extend to other areas. 

Some of this funding will be redeployed to other areas, such as artificial intelligence, quantum information science, biotechnology and nuclear energy, but the expectation is that NSF funding will remain substantially below its 2015-2024 average.

Also, on May 5, NSF capped coverage of indirect research costs—laboratory space and equipment, administrative costs, and data security, among other costs—at 15% of granted funds. Previously, NSF would negotiate overhead allocations with higher ed institutions on an individual basis.

Zoom in: What’s in the lawsuit?
  • In the court documents, the plaintiffs argue that NSF’s moves to cap and slash funding not only cause immediate, irreparable harm, but “devastate critical STEM research at higher education institutions.” According to the states, the changes made by NSF hinder higher ed institutions’ ability to maintain even the most basic infrastructure required for their research programs.
  • The states also claimed that the changes undermine the nation’s ability to maintain its position as a global leader in STEM and were “in complete derogation” of congressional mandates that go back as far as the 1980s to promote an inclusive STEM workforce.
What’s Next

The plaintiffs are asking the U.S. District Court for the Southern District of New York to block NSF’s April and May directives. As of today, no ruling has been issued. Our team will continue to monitor this litigation as it persists. [Higher Ed Dive]

The future of American research is in flux regardless. In the White House’s proposed FY2026 “skinny budget,” NSF faces a dramatic 58.5% cut to its nearly $9 billion budget and significant restructuring and downsizing due to its prior funding of projects that promote “radical DEI and climate change alarmism.”

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