Key Takeaways
- ~15,000–16,000 grants terminated or suspended across federal agencies under DOGE-directed reviews — total value exceeds $30 billion
- USAID virtually eliminated — foreign assistance grants were the single largest category cut; domestic programs largely protected
- Courts blocked multiple mass terminations at NIH, HHS, and USAID — injunctions vary in scope; legal battles ongoing through 2026
- NSF, DOE, USDA, SBA, and HUD core programs continue operating normally — new FOAs still being issued
- If your grant was terminated: request a written termination notice, file an administrative appeal within 30 days, and consult your grants management officer before stopping work
What Happened
Starting in early 2025 and accelerating through 2026, the Department of Government Efficiency (DOGE) conducted sweeping reviews of federal grant portfolios across most civilian agencies. The reviews targeted grants deemed inconsistent with executive priorities — including programs focused on DEI, climate research not aligned with energy production goals, foreign development assistance, and public health messaging. The result was the largest disruption to federal grant funding in modern history, creating uncertainty for tens of thousands of nonprofits, universities, and local governments that depend on federal awards.
What Was Cut: Agency-by-Agency Breakdown
The scale of terminations varied dramatically by agency. USAID bore the brunt — the agency was effectively dismantled, with foreign assistance grants totaling tens of billions of dollars canceled within weeks. For domestic grant seekers, the picture is more nuanced.
| Agency | Impact Level | Programs Affected | Status |
|---|---|---|---|
| USAID | Severe | Virtually all foreign assistance grants | Mostly terminated; some court-blocked |
| HHS / NIH | Significant | DEI research, indirect cost rate caps proposed, select program cuts | Courts blocked indirect cost changes; some terminations restored |
| EPA | Moderate | Environmental justice grants, some climate programs | Partial cuts; ongoing litigation |
| Education | Moderate | DEI-focused programs, some teacher training grants | Cuts upheld in some circuits |
| State Dept | Significant | Exchange programs, international education | Largely terminated |
| NSF | Low | Some DEI-adjacent program supplements | Core research funding intact |
| USDA | Low | Minimal core program disruption | Operating normally |
| DOE | Low | Minimal | Operating normally |
| SBA | Low | Minimal | Operating normally |
| HUD | Low-Moderate | Some community development supplements | CDBG core funding intact |
The NIH Situation: What Happened and Where It Stands
NIH became a flashpoint. Early in 2025, the administration proposed capping indirect cost reimbursement rates at 15% — a dramatic reduction from the typical 40–60% rates negotiated by research universities. Multiple federal district courts issued immediate injunctions, finding the change violated the APA and existing grant terms. As of mid-2026, indirect cost rate changes at NIH remain blocked pending further litigation, though the legal situation is subject to change.
Separately, NIH terminated a number of active grants it categorized as promoting DEI or studying topics outside agency priorities. Some of those terminations were also challenged in court with mixed results. For researchers with active NIH awards, the practical advice is: monitor your program officer communications, do not assume a court injunction protects your specific award, and maintain documentation of all work performed against your awarded budget.
The Legal Landscape: What Courts Have Said
Federal courts across multiple circuits engaged with DOGE-related grant termination challenges throughout 2025–2026. Several consistent themes emerged from the rulings:
Mass terminations without individualized review have fared poorly in court. Judges have found that agencies cannot terminate thousands of grants simultaneously without providing case-specific written notice and a meaningful opportunity to contest. Under 2 CFR Part 200.340, termination for convenience requires written notice, and for cause requires an opportunity to cure.
Separation of powers arguments — that Congress appropriated the funds and the executive cannot refuse to spend them — have had some traction, particularly in cases where agencies attempted to impound congressionally directed funds. Courts have generally been more receptive to these arguments for programs with explicit congressional line-item appropriations than for discretionary grant pools.
The practical upshot: if your grant was terminated, the legal avenue is real but uncertain. The outcome depends heavily on the specific agency, program, and legal theory applied in your jurisdiction.
Programs That Remained Unaffected
It's important to separate the headline number — 16,000 terminations — from the actual grant landscape for domestic applicants. The vast majority of federal grants that domestic nonprofits, universities, local governments, and small businesses apply for continued without interruption through 2026:
- NIH R01, R21, SBIR/STTR research mechanisms — continued issuing new FOAs; peer review process unchanged
- NSF research grants — all core mechanisms (CAREER, MRI, standard research) operating normally
- USDA rural development programs — Community Facilities, Water & Waste, ReConnect, VAPG all continued
- DOE Office of Science and ARPA-E — new FOAs issued regularly through 2026
- HUD CDBG and HOME programs — formula allocations to states and localities continued
- SBA SBIR programs — all agency SBIR programs continued; SBA oversight mechanisms unchanged
- FEMA hazard mitigation grants — BRIC, HMGP, and FMA programs continued
If Your Grant Was Terminated: What to Do
Grant termination does not mean you immediately stop work and return all funds. Federal regulations give recipients specific rights and obligations. Here is the correct sequence:
Termination Response Protocol
- Request written termination notice — you are entitled to a written explanation citing the regulatory basis (2 CFR 200.340). If you received only a system-generated notice, request formal written justification from your grants management officer.
- Do not stop work immediately — work may continue during the appeal period. Review your award terms for the specific wind-down provision; many allow 30–60 days of continued activity.
- File an administrative appeal — most agencies have a grants appeal process. File within 30 days of the termination notice. Document every expense incurred through the termination date.
- Preserve all records — retain all financial records, timesheets, deliverables, and communications for at least three years post-closeout (2 CFR 200.334). These are essential for audit and appeal purposes.
- Consult legal counsel — organizations in sectors with active litigation (NIH, EPA, USAID) may have grounds for injunctive relief. Several nonprofit legal organizations are providing pro bono support to affected grantees.