Trump cuts $9 billion in overhead costs from NIH research grants: ‘A ripoff!’
The National Institutes of Health (NIH) recently announced a significant cut in overhead costs associated with federally funded research grants that are distributed to various institutions. This move is part of a broader effort by the Trump administration to reduce wasteful spending across government agencies.
In fiscal year 2023, the NIH allocated approximately $35 billion across 50,000 grants to research institutions like universities and hospitals. Of this amount, $9 billion was designated for indirect costs, which cover expenses related to building depreciation, equipment, capital improvements, debt interest, and operation and maintenance expenses.
Traditionally, when a research grant is awarded, a percentage of the funding is allocated to cover these indirect costs at the facility where the research is conducted. The historical percentage for indirect costs has been around 27 to 28% for each grant. However, the NIH’s new directive imposes a 15% threshold, unless otherwise negotiated.
Private foundations that fund research typically provide lower indirect cost rates compared to the federal government. For example, the Bill and Melinda Gates Foundation has a maximum indirect cost rate of 15%, with a 10% rate for institutions of higher education. Many universities have voiced confusion and backlash against the new indirect cost cap, citing potential disruptions to vital research activities and student opportunities.
The University of Wisconsin-Madison and the University of Michigan are among the institutions expressing concerns about the impact of the policy on their current grants. Dr. Francis P. Wilson, an associate professor at Yale, criticized the move as part of the administration’s cost-cutting measures without considering the downstream consequences.
The Department of Government Efficiency, led by Elon Musk, praised the NIH’s cost-cutting efforts, stating that it saved over $4 billion annually in excessive grant administrative costs. The Trump administration’s decision to put a cap on indirect costs associated with agency research grants aims to redirect funds towards legitimate scientific research rather than administrative bloat.
Overall, the NIH’s cost-cutting measures have sparked mixed reactions from universities and researchers. While some applaud the move as a step towards more efficient spending, others are concerned about the potential impact on research activities and opportunities for students. The ongoing debate highlights the importance of striking a balance between cost-cutting measures and maintaining support for critical research initiatives.
