Budgeting Knowledge: How Federal Grants Affect Universities and Science as a Whole

By Cooper Marko, Science and Technology

Higher education is one of our proudest aspects of America, and has been a crucial part of our identity since the founding of our nation. These Universities are one of the largest and most important producers of scientific research in the United States. They receive almost $60 billion towards research from the National Institute of Health (NIH) alone, towards researching topics like cancer, neurological disorders, and diabetes (AAAS 2025). Federal agencies like the Department of Health and Human Services (HHS) and the Department of Energy (DOE) also contribute a large sum of money to universities for the advancement of science in the form of federal grants and contracts. Together, they totaled a staggering $300 billion to universities in 2024 (USAspending.gov 2025). This number might be astounding at first glance, and will likely raise some questions, but with some important context–and some research, the facts surrounding federal funding of universities and research are not as far-fetched as the numbers might seem.

Where does the money go?

Since President Lyndon Johnson’s signing of the 1965 Higher Education Act (HEA), the Federal Government has allocated funds towards universities and colleges as a way to make higher education more accessible and to provide the institutions with the funding and resources needed to succeed. These funds are allocated to different functions of the university, including instruction, research, student services, and grant aid to students. The distribution of these funds depends on the type of institution (public/private, 2/4 year), and the institutional mission (NCES 2023). 

Other funding comes from federal agencies, such as the aforementioned HHS and DOE. These agencies often have sub-agencies like the NIH and Centers for Disease Control and Prevention (CDC), both sub-agencies of HHS, which is where most of the research grants towards areas involving life science research are channeled through. In fact, over 55 percent of all federal funding towards research goes to life sciences, and this number jumps to 75% if engineering is included (USAfacts 2023). These channels for funding are then allocated to the various universities across the country. The funds are not evenly distributed, however. In fact, over one-third of the funding was spent by just twenty colleges, including household names like Johns Hopkins University, University of California, San Diego, and Columbia University to name a few (NSF 2023). The remaining institutions receive less than $500 million from the federal government, with our very own Binghamton University receiving under $65 million federally (Cohn 2025).

How does the money flow?

Federal funding is largely split into two types of funding: Grants and Contracts. Grants are funds that go towards public projects or services, and are authorized by federal law (Grants.gov). These are often given to universities for specific research topics, such as cancer or vaccine research. Contract funding functions as the name suggests: the Federal Government pays the institution in exchange for a good or service, much like how the Government contracts with private companies. Often the Federal Government will contract with a university for a product like a new technology or prototype, commonly with agencies like the National Aeronautics and Space Administration (NASA) and the Department of Defense (DOD). 

How have recent budget cuts affected universities?

President Trump has issued many executive orders aimed at freezing grants, specifically targeted towards health research, on things such as pathogens and other medical research (Stein 2025). These executive orders have had various effects, from decreasing the amount of funding federal agencies and departments can give as grants, and capping the indirect funds that federal programs like the National Science Foundation (NSF) can give out (Columbia Law School 2025).

Losing out on grants has cost a lot of programs across many universities to shut down, or limit their research capabilities. Some of these grant terminations stopped ongoing research, causing an outcry among the scientific community. Many have argued that it is a major waste of taxpayer money to slash funding from researchers who may already have results, but cannot publish their findings due to these cuts (Flannery 2025). These cuts have led to over 1,600 grants and over $1.5 billion to be cut, with states like New York, California, and Massachusetts being hit the hardest (Grant Witness 2025). 

What is the greater impact of this?

Funding for research and the sciences has been an important part of America’s history since the signing of the HEA by President Johnson in 1965. Since then, various institutions have discovered important things about our world, and ways to fix problems around us. From medical marvels like Pacemakers, Insulin, and the Polio vaccine, all things that have saved millions of lives, to things like rocket fuel, plexiglass, and computers all came from universities and their research. While these funding cuts largely target the major institutions that receive a large bulk of the funding, it can also impact the smaller state schools and community colleges, ultimately making the fight for federal funding more competitive. These schools often give opportunities to people who otherwise could not afford or have access to research, and depend on the funding to stay afloat. Binghamton University has gained a lot of traction and prestige due to its impressive research programs and scientific innovation, and requires federal funding to support these programs. Currently, the NSF and other federal sources of funding are reviewing and terminating grants that no longer align with their mission. The NSF website describes these areas as “including but not limited to those on diversity, equity, and inclusion (DEI), environmental justice, and misinformation/disinformation.” (NSF 2025). 

The future of federal research funding is unclear, and misinformation has never been easier to spread, as many government websites face funding cuts and cannot update their constituents. It is clear that knowledge and innovation is a key part of our identity as Americans, and higher education plays a large role in that, from the community colleges to the world-renowned universities. It is difficult to say what the next life-changing invention or treatment is to come, but what’s undeniable is the need for education. In the same way that the heart fuels the brain, our universities—and knowledge as a whole, need the heart of the nation to supply them with the means to stay afloat.

References

“Binghamton University Secures Largest Grant in School History after Winning ‘Innovative Engines’ Competition.” 2024. WIVT – News 34. https://www.binghamtonhomepage.com/science-and-technology/binghamton-university-secures-largest-grant-in-school-history-after-winning-innovative-engines-competition/ (October 23, 2025).

Cohn, Jason. 2025. How Much Federal Funding Do Colleges and Universities Receive? Urban Institute. https://www.urban.org/urban-wire/how-much-federal-funding-do-colleges-and-universities-receive (October 23, 2025).

Collier, Roger. 2017. “Massive Cuts to Science and Medicine in Trump Budget.” CMAJ : Canadian Medical Association Journal 189(23): E812–13. doi:10.1503/cmaj.1095437.

“Dedicated to Assisting Academic Researchers throughout the Development, Technology Transfer and Commercialization of Their Intellectual Property.” http://www.ipadvocatefoundation.org/ (October 23, 2025).

“Federal Awards | Advanced Search | USAspending.” https://usaspending.gov/search (October 23, 2025).

Flannery, Mary Ellen. “Trump Cancels Federal Research Grants. What Are the Consequences? | NEA.” https://www.nea.org/nea-today/all-news-articles/trump-cancels-federal-research-grants-what-are-consequences (October 23, 2025).

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“Mapping Federal Funding Cuts to U.S. Colleges and Universities.” 2025. Center for American Progress. https://www.americanprogress.org/article/mapping-federal-funding-cuts-to-us-colleges-and-universities/ (October 22, 2025).

“The NCES Fast Facts Tool Provides Quick Answers to Many Education Questions (National Center for Education Statistics).” https://nces.ed.gov/fastfacts/display.asp?id=75 (October 23, 2025).

“Public Health Service Act – NCI.” 2016. https://www.cancer.gov/about-nci/overview/history/public-health-service-act (October 23, 2025).

Stein, Rob. 2025. “Trump Restricts Funding for ‘gain-of-Function’ Research — Calling It Dangerous.” NPR. https://www.npr.org/2025/05/05/nx-s1-5267612/trump-gain-of-function-research-funding (October 23, 2025).

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