Overview of Proposed Changes to the National Institutes of Health

Updated: July 30, 2025

Please visit the Federal Research Updates page for the most updated information.

The NIH recently released their proposed Fiscal Year 2026 (FY'26) budget with recommended changes including a reduction in funding, a reorganization of the Institutes within NIH, a cap on indirect costs, cuts to NIH positions, and grant cancellations. 

Please make note, however, that the changes that are documented below are only proposed changes. There are several more steps that need to occur before these changes are finalized, including:

• A budget request must be submitted to Congress;
• Both the House and Senate need to pass budget resolutions that outline the proposed spending;
• Budget is then included in an appropriations bill that passes both the House and the Senate; and
• Congress must approve the budget, which includes finalized funding levels for NIH.

Thus, there is plenty of room for things to change before the final budget is approved.

Reductions in Funding

The proposed budget for FY26 is $27.9 billion. This is $18.1 billion less, representing an ~40% cut, from the current FY'25 budget. 

Below is a comparison of the proposed budget to last year’s budget broken down by Institute.

Most of FY'26 funding ($15.1 billion or 54%) will be given out through Research Project Grants, such as R01s, R21s, etc. This is $11.6 billion less than in FY'25 and it is estimated that 4,312 research project grants will be awarded (1,783 fewer than in FY25).

Research center grants will be funded at $1,484.3 million, which is $1,127.8 million less than in FY'25 and is estimated to fund 817 grants (308 fewer than in FY'25). Research training grants will be funded at $654.5 million, $359.3 million less than in FY'25 and is expected to fund 10,678 Full-Time Trainee Positions (FTTPs), representing 6,669 fewer than in FY'25. The balance of the funding will support other research, contracts (research and development), intramural research, research management and support, and the director’s office.  All of these categories have also been reduced from FY'25 levels.

Restructuring of the Institutes

Another major change affecting NIH is the restructuring of its institutes, where the number of Institutes will be reduced from 27 to just 8 Institutes.

• Four Institutes, including the National Institute on Minority Health and Health Disparities (NIMHD), National Institute of Nursing Research (NINR), Fogarty International Center (FIC), and the National Center for Complementary and Integrative Health (NCCIH), will be eliminated. 
• The National Cancer Institute (NCI), National Institute of Allergy and Infectious Diseases (NIAID), National Institute on Aging (NIA), and National Institute of General Medical Sciences (NIGMS) will remain unchanged.  
• The remaining Institutes will be consolidated into four new Institutes. These new Institutes will be the National Institute on Body Systems (NIBS), National Institute on Neuroscience and Brain Research (merging NINDS, NEI, NIDCR) (NINBR), National Institute on Behavioral Health (NIBH), and the National Institute for Child and Women’s Health, Sensory Disorders, and Communication (NICWHSDC).

Below is a table showing the changes to the NIH structure:

The restructuring of the Institutes is intended to align research with the new administrations’ ideological beliefs and will focus on chronic diseases and other priorities flagged in the “Make America Healthy Again” framework. Research on climate change, gender, racial disparities, and Diversity, Equity, and Inclusion (DEI) is being deprioritized or eliminated. The National Institute of Environmental Health Sciences (NIEHS) will be relocated to the Department of Health and Human Services and will reside within the Administration for a Healthy America.

Cap on Indirect Rates

Other NIH changes include a cap of 15% for the indirect rate. This is a big change for Virginia Tech, whose current rate is 61%.  Since this rate is currently being challenged in the courts, Virginia Tech is continuing to use their negotiated rate until a legal decision is finalized. 

Virginia Tech is working with its peers and national associations to educate lawmakers about the importance of Facilities and Administrative costs (i.e., indirect costs), exploring the possibility of shifting some indirect costs to direct charges, and considering how to carry on with reduced revenue.

Cuts to NIH Positions and Grant Cancellations

The Department of Health and Human Services, in which NIH resides, has proposed/begun to cut ~20,000 full-time employees, through both reductions in force and voluntary separations. Of these planned cuts, NIH is slated to lose a total of approximately 5,000 full-time employees. To date, ~1,200 positions have already been cut.

Along with the personnel cuts, thousands of grants were also cut or rescinded. As of early July, roughly 4,473 grants, which included research grants, fellowships, career development awards, and training grants totaling over $10.1 billion, were cut.

Although not all were NIH grants, as of the end of the spring semester, Virginia Tech had 55 projects, worth $46.5 million, terminated.  A total of 45 principal investigators were affected.

How to Move Forward

An overview of the FY'26 NIH proposed budget provides good information on NIH priorities for the coming year. It is worth the time to look at it and see if your research either fits into one or more of the priorities or can be tweaked to fit within them.  As always, the more you know about something, the easier it is to navigate within the system and the more likely your proposal will be funded.