An article from Dive Brief 16 states sue National Science Foundation over wide-reaching research cuts

The lawsuit takes aim at the agency’s cap on indirect research costs and its mass termination of grants related to diversity, equity and inclusion.

Published May 30, 2025 Ben Unglesbee Senior Reporter

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The entrance to the National Science Foundation's building in Washington, D.C. Sixteen states sued the agency over its moves to terminate diversity-related research and cap indirect research cost reimbursement. JHVEPhoto via Getty Images Dive Brief:

• Sixteen states sued the National Science Foundation on Wednesday over the agency’s cap on funding for research overhead and its mass termination of grants related to diversity, equity and other topics deemed verboten by the Trump administration. 
• Plaintiffs allege both moves violate federal law and threaten major research projects and millions of dollars in federal funding at universities in their states. An NSF spokesperson declined to comment on the lawsuit. 
• The suing states — nearly all of whom have Democrat attorneys general — asked a federal judge in New York to block NSF’s indirect cost cap and its April directive barring diversity-related grants.

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On April 18, the science research agency — which was founded in 1950 and had a budget of $9 billion last fiscal year — issued a statement announcing it would prioritize research focused on creating “opportunities for all Americans everywhere.” 

“Research projects with more narrow impact limited to subgroups of people based on protected class or characteristics do not effectuate NSF priorities,” the agency said at the time.

The same day, NSF began issuing mass termination notices for projects that seek to boost participation in scientific fields by "women, minorities, and people with disabilities," according to Wednesday's complaint. Studies on misinformation and environmental justice also received termination notices.

The canceled projects include a University of Delaware study on post-traumatic stress disorder and suicidality among veterans; a new doctoral program in New Jersey promoting increased participation of underrepresented groups in science-related Ph.D.s; and a University of Oregon initiative providing some 20,000 students with learning experiences in computer science. 

Later, in May, NSF moved to cap reimbursement for indirect research costs at 15% for all new grants issued to colleges. The cuts affect funding for equipment, administrative staff, laboratory construction and other expenses in research programs.

The funding cap already sparked at least one other lawsuit, from a group of higher education associations.

The change could bring steep financial and infrastructural damage to university research programs that the government relies on to advance knowledge and technology in the country, the state plaintiffs argued. 

According to Wednesday’s lawsuit, the “vast majority” of university projects in the plaintiff states had negotiated indirect research rates between 40% and 60% with NSF. Those states’ “institutions will not be able to maintain essential research infrastructure and will be forced to significantly scale back or halt research, abandon numerous projects, and lay off staff,” the plaintiffs argued. 

In both cases — the April directive and May indirect cost cap — the NSF violated law, the states said. 

In the case of the April directive, the plaintiffs pointed to statutes that explicitly direct the agency to promote scientific participation among underrepresented groups in the U.S. 

They further argue that the longstanding policy has worked, citing statistics showing that the number of women in science and engineering occupations or with related degrees doubled between 1995 and 2017. Participation in these fields by those from minority groups rose from 15% to 35% during the period. 

The plaintiffs likewise argued that the indirect cost cap undermines a federal law directing the NSF to support basic scientific research and education programs.

Under the Trump administration this year, the National Institutes of Health and the U.S. Department of Energy also both adopted similar 15% caps on overhead reimbursement. Courts have blocked both policies, though the cases are ongoing.

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