Recent federal court decisions have brought a significant victory for the research community, with important implications for social work research infrastructure and funding stability.
January 2026: Appeals Court Blocks NIH Indirect Cost Cap
In January, the U.S. Court of Appeals for the First Circuit unanimously upheld a lower court ruling preventing the National Institutes of Health (NIH) from implementing a proposed 15% cap on indirect (facilities and administrative, or F&A) cost reimbursement for federally funded research.
The court found that the policy violated both federal appropriations law and NIH’s own regulations, which require that indirect cost rates be negotiated individually with institutions, rather than imposed as a uniform cap.
This ruling preserved a nationwide permanent injunction and ensured that universities, health systems, and research institutions, including those conducting social work research, could continue to recover the full, negotiated costs necessary to support research infrastructure.
Background: Why Indirect Costs Matter
Indirect costs fund the essential infrastructure that makes research possible, including laboratory space, data systems, compliance, and administrative support. Historically, these rates vary widely (often 25–60% or higher) depending on institutional needs and negotiated agreements.
In February 2025, NIH proposed a flat 15% cap, arguing it would reduce federal spending. However, the policy was widely opposed by states, universities, and national associations, including SSWR, who warned it would undermine research capacity, disrupt ongoing studies, and reduce access to clinical and community-based services.
April 2026: Administration Declines to Appeal
Following the January decision, the administration had 90 days to seek review by the Supreme Court of the United States. That deadline passed in early April without an appeal being filed.
As a result, the legal challenge has effectively concluded, leaving the lower court rulings in place and permanently blocking the NIH indirect cost cap.
What This Means for Social Work Research
- Institutions can continue using negotiated indirect cost rates, preserving funding for research infrastructure.
- The decision reinforces the importance of congressionally established protections governing federal research funding.
- It underscores the role of coordinated advocacy by higher education, health, and research organizations in shaping federal policy.
At the same time, policymakers have signaled continued interest in revisiting indirect cost structures through other avenues, including future budget proposals and administrative actions.
Bottom Line
This outcome represents a major win for the research enterprise, protecting billions in funding that supports the infrastructure underlying social work research, training, and community impact. SSWR will continue to monitor federal policy developments and advocate for sustained, equitable investment in research that advances social and behavioral health.