- What happened: the subaward ban and its fallout
- Timeline: from termination to reinstatement
- Key questions answered
- What it means for foreign subawardees and research offices
- What to track going forward
The US National Institutes of Health (NIH) has reinstated South Africa grant funding that had been frozen for months, lifting a hold on payments for scores of existing awards after a policy change nearly collapsed one of its largest overseas HIV and tuberculosis research partnerships. The reversal does not undo the underlying policy — a ban on new foreign subawards — but it restores cash flow to active clinical trials and signals how the NIH intends to manage international collaboration going forward.
For research administrators, sponsored-programs offices, and institutional leaders outside the United States, the episode is a case study in how quickly a funder’s compliance architecture can change, and how little advance notice foreign partners typically get.
What happened: the subaward ban and its fallout
On 1 May 2025, the NIH announced it would no longer permit foreign “subawards” — the standard mechanism by which a US-based principal investigator holding a “prime” NIH grant channels a portion of the funds to a collaborating institution abroad. Going forward, foreign partners would instead need to apply for direct awards from the NIH itself.
The agency framed the change as an effort to improve financial tracking and safeguard national security. In practice, the shift landed on a system that was not ready for it: the NIH’s own staff guidance warned that the infrastructure for processing direct foreign awards might not be operational until 30 September 2025.
South Africa was disproportionately exposed. The country hosts one of the NIH’s largest overseas research footprints, particularly in HIV and TB clinical trials run through institutions such as the University of the Witwatersrand and the South African Medical Research Council (SAMRC). Disruption had begun even earlier: in March 2025, the NIH moved to freeze or terminate roughly 280 grants tied to South African projects, well before the formal subaward ban took effect.
The scale of the exposure was significant. In the prior funding year, the NIH had supported approximately 3,600 subawards in foreign countries worth more than $400 million in total. South African institutions alone had been receiving an estimated $100–150 million a year in direct and sub-awarded NIH funding, according to analysis published by Physicians for Human Rights.
Timeline: from termination to reinstatement
The sequence of events matters for any institution assessing exposure to future funder policy shifts. The table below sets out the key dates drawn from contemporaneous reporting.
| Date | Development |
|---|---|
| March 2025 | NIH moves to freeze or terminate roughly 280 grants for South African projects |
| 1 May 2025 | NIH formally bans new foreign subawards; requires direct-award applications instead |
| 27 June 2025 | NIH grants official Michelle Bulls confirms existing clinical-research subawards can continue via a new “supplement” mechanism; roughly 100 prime awards to South African researchers permitted to proceed |
| 30 June 2025 | Staff guidance carves out an exception for human-subjects research submitted before the ban |
| July 2025 | NIH lifts the payment hold on scores of existing South Africa grants, without public explanation |
| 30 September 2025 (target) | NIH’s new direct-award tracking system for foreign partners due to be operational |
Notably, the reinstatement applied to grants that had been frozen, not to the larger population of grants that had been fully terminated. Separately, the NIH has also been under court order to reinstate a portion of the more than 2,000 grants it cancelled nationwide over politically sensitive research topics — a distinct, US-domestic dispute that runs in parallel to the foreign-subaward story.
Key questions answered
Have NIH grants been reinstated?
Yes, partially. In July 2025 the NIH lifted a payment hold on scores of existing South Africa grants and introduced a “supplement” mechanism letting foreign clinical-research subawards continue. It remains unclear whether grants that were fully terminated, rather than merely frozen, will also be restored.
How many NIH grants have been canceled?
Across all research areas, the federal government terminated approximately 2,100 NIH grants worth around $9.5 billion, according to tracking by Harvard T.H. Chan School of Public Health. Within that total, roughly 280 South Africa-linked grants were separately frozen or ended starting in March 2025.
Do South African universities face a funding crisis from the freeze?
Yes. Institutions including the University of Cape Town and Wits University reported severe financial strain, staff layoffs, and applications for emergency government funding — with the Wits Health Consortium reportedly seeking over R1.8 billion from South Africa’s Treasury to offset the shortfall.
What it means for foreign subawardees and research offices
The reversal is narrow, temporary, and administratively burdensome — not a return to the pre-2025 status quo. Institutions that rely on NIH funding through US-based collaborators should treat the following as durable changes rather than transient disruption:
- Subawards are being phased out for new and renewal applications. The direct-award model is now the NIH’s default path for foreign partners, and institutions should build direct-application capacity rather than assuming subaward continuity.
- The supplement mechanism is a stopgap, not a policy. An NIH grants official described the conversion process as “a huge administrative lift” — sponsored-programs offices should expect delays and duplicated paperwork during the transition period.
- Frozen and terminated are legally distinct categories. Institutions holding terminated (not just frozen) awards should not assume the July reinstatement applies to them without written confirmation from their program officer.
- Compliance offices need contingency plans. Bodies such as NCURA, EARMA, and ARMA have flagged funder-driven subaward volatility as a growing risk category for institutional research administration — not unique to the NIH or to South Africa.
For research administration teams managing sponsored programmes with US federal funders, the practical lesson is procedural: subaward agreements should now include explicit clauses addressing funder-initiated conversion to direct awards, and institutions should maintain the internal capacity to submit direct NIH applications on short notice.
What to track going forward
Three open questions will determine whether this remains a contained South Africa story or a template applied more broadly to NIH’s international grant portfolio.
First, whether the 30 September 2025 target for a functioning direct-award tracking system holds, or whether the interim supplement mechanism becomes a permanent parallel process. Second, whether the reinstatement logic extends to grants that were fully terminated rather than frozen — a distinction the NIH has not yet resolved publicly. Third, whether other major NIH partner countries in HIV, TB, and global-health research face the same subaward-to-direct-award transition South Africa has already been through.
For institutions with NIH-funded international partnerships, the prudent posture is to document funder communications carefully, confirm award status (frozen versus terminated) in writing, and monitor NIH policy notices for extensions or modifications to the direct-award transition timeline.
