Universities forge a bumpy new path on indirect research costs

Since January 2025, the Donald J. Trump administration has targeted scientific research on multiple fronts, from freezing grant funding to proposing drastic cuts to federal science budgets. The administration has also made several attempts to cap reimbursements for the indirect costs of federally funded research at 15%, rather than the federally negotiated rates, which reimburse at levels varying from 30% to 70%. But efforts are underway to find a new path between the current system and the administration’s proposed cap.Unlike funding for direct costs, which pay for lab equipment and researcher salaries, indirect cost reimbursements pay for overhead related to facility maintenance, regulatory compliance, and other things that help support research at universities and research institutions. Capping the indirect rate would therefore limit how much an institution can be reimbursed for research-related overhead. The National Institutes of Health was the first agency to cap its rates, in February 2025, and argued that caps would allow more money to be channeled to scientific research rather than to research overhead.Many in the research community, however, say the caps would devastate US research. “Cuts to reimbursement of these costs are cuts to medical research and represent the federal government stepping back from commitments it has made to world-leading researchers,” the Association of Public and Land-grant Universities (APLU) president Mark Becker said in a statement after the NIH announced the reimbursement caps.The research community and the organizations representing them pushed back, mainly through lawsuits, which have been successful overall. Congress, also concerned about the impacts