Trump administration wields False Claims Act against universities

At the University of Michigan—among the nation’s NIH top fund recipients—researchers saw new funds abruptly frozen this spring, as university lawyers reviewed controversial changes to grant terms. Administrators feared increased exposure to the False Claims Act (FCA), which the Trump administration used to tie funding to compliance with federal civil rights law and a 20 January executive order requiring “biological sex” recognition and barring certain DEI activities, as reported by Undark.

The FCA, a Civil War-era antifraud statute, allows the federal government to claim triple damages for violations and is frequently used in federal contract fraud cases. “The Trump administration is using the False Claims Act as a massive threat to the bottom lines of research institutions,” said University of Michigan law professor Samuel Bagenstos—though he called successful lawsuits unlikely. Still, universities could face enormous penalties, or expensive litigation, for even minor missteps, pushing some to preemptively pause research grants.

Policy changes have come quickly. In April 2025, the NIH announced that any false statement regarding compliance could trigger FCA liability—later walking this back amid confusion and backlash. In May, the DOJ encouraged FCA use in new civil rights enforcement efforts.