On February 7, 2025, NIH announced steep cuts to the total awards going to R&D grants, by capping the indirect rate at 15%. Some universities have indirect rates as high as 60%.
Indirects have gotten into the news periodically; see a Wikipedia page about a Stanford "scandal" in the 1990s. Trump 2017-2021 administration talked about indirect rate cuts.
Some of this weekend's news reports described only the information released as an NIH tweet on "X". I'd point out, you need to see the full policy justification at the NIH website, which most articles do not link to.
https://grants.nih.gov/grants/guide/notice-files/NOT-OD-25-068.html
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- General news posts on the cuts are available by the dozen; here's one from The Hill,
- And from NBC,
- And from NPR,
- STAT projects university dollar losses (subscription),
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AI Corner
This is a Chat GPT "neutral summary" of the NIH announcement and rationale.
The National Institutes of Health (NIH) has announced a standardized 15% indirect cost rate for all NIH grants, replacing the previously negotiated indirect cost rates for both new grants and existing grants to institutions of higher education (IHEs), effective immediately.
Rationale for the Change:
- NIH aims to maximize the portion of grant funding that directly supports scientific research by reducing the share allocated to indirect costs (which cover expenses like facilities and administrative overhead).
- Historically, NIH has reimbursed indirect costs at an average rate of 27–28%, with some institutions receiving over 50–60% in indirect cost recovery.
- NIH notes that private research funders, such as the Bill & Melinda Gates Foundation, often impose lower indirect cost rates (e.g., 10–15%), and universities regularly accept grants with these lower rates.
- The decision is framed as aligning NIH's policies with private sector benchmarks and ensuring that taxpayer-funded research investments are used as efficiently as possible.
Implementation:
- The 15% cap applies to all future NIH grant awards and to existing grants at IHEs for expenses incurred after February 10, 2025.
- NIH states that this rate is higher than the 10% minimum indirect rate set by federal regulations, aiming to balance institutional needs with NIH’s funding priorities.
NIH presents this policy as a strategic decision to optimize federal research funding, ensuring that more money directly supports scientific discovery and innovation while maintaining a uniform and predictable indirect cost structure across all grant recipients.
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