The National Institutes of Health announced late Friday that it will be significantly reducing the amount of money universities can receive for “indirect costs” of research, a move that will take effect next Monday.
In an X post, the NIH said it will cap the indirect cost rate, which is for infrastructure costs such as facilities, maintenance, and security, at 15% for all the universities it gives grants to. That is a decrease from the 30% rate most schools charged the government for and the over 60% rate some Ivy League institutions charged.
The NIH also noted that in fiscal 2023, over one-fourth of the money granted to universities for research was used for these “indirect costs.” Now, the new rate cap will save more than $4 billion a year, the agency said.
The move from the NIH was praised by Elon Musk, who as head of the Department of Government Efficiency is leading similar cost-cutting initiatives within the federal government. On Friday night, he expressed disbelief at the rates some top universities were charging.
“Can you believe that universities with tens of billions in endowments were siphoning off 60% of research award money for ‘overhead’? What a ripoff!” he posted on X.
DOGE communications director Katie Miller similarly lauded the move, saying it will eliminate “Liberal DEI Deans’ slush fund.”
“President Trump is doing away with Liberal DEI Deans’ slush fund. This cuts just Harvard’s outrageous price gouging by ~$250M/ year,” she posted on X.
University researchers, however, slammed the funding cut, saying it would be “devastating” for research.
“Frankly, this means that the lives of my children and grandchildren — and maybe yours — will be shorter and sicker, because discoveries will not be made. It means the NIH research that has been the backbone of the high-tech health economy will be gutted, reducing their economic opportunities,” Theodore Iwashyna, a professor of medicine at Johns Hopkins University, told CNN.
The heads of the Association of American Medical Colleges also warned in a statement that the move could “diminish the nation’s research capacity, slowing scientific progress and depriving patients, families, and communities across the country of new treatments, diagnostics, and preventative interventions.”
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Sen. Patty Murray (D-WA), the top Democrat on the Senate Appropriations Committee, echoed these sentiments, calling the rate cap “illegal.”
“Trump and Elon’s proposal is ILLEGAL & amounts to an indiscriminate funding cut for research centers of all sizes, NOT just Ivy League universities. It will mean shuttering labs across the country, layoffs in red & blue states, and derailing lifesaving research on everything from cancer to opioid addiction. We all need to speak out to save lives,” she posted on social media.
This article was originally published at www.washingtonexaminer.com
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