NIH Cuts Indirect Research Funding to 15%, Sparking Backlash \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ The National Institutes of Health (NIH) announced a significant funding cut, capping indirect costs for research grants at 15%, down from an average of 27-28%. This move is projected to save $4 billion annually, but scientists warn it could jeopardize lab space, equipment, and essential research operations. Critics, including former Harvard Medical School Dean Jeffrey Flier, called the decision reckless, while others argue for a more transparent funding model. Supporters of the policy claim it reduces administrative waste, but researchers fear it will undermine U.S. biomedical innovation.
NIH Funding Cuts: Quick Looks
- NIH is capping indirect research funding at 15%, down from an average of 27-28%.
- The cuts are expected to save $4 billion annually, redirecting funds toward direct scientific research.
- Indirect costs cover lab space, equipment, utilities, and personnel, all essential for research institutions.
- Scientists warn the cuts could severely impact research, reducing lab funding and limiting scientific advancements.
- Former Harvard Medical School Dean Jeffrey Flier called the decision “insane”, while others demand more transparency in grant allocation.
- NIH compared its new policy to private research funders, which cap indirect costs at 10-15%.
- Trump administration officials praised the move, claiming it eliminates wasteful university spending.
- Dr. Jay Bhattacharya, Trump’s NIH director nominee, is expected to address these cuts in upcoming Senate confirmation hearings.
Deep Look
Major NIH Funding Change Sparks Controversy
The National Institutes of Health (NIH) has dramatically reduced the amount of indirect funding available for research institutions, capping it at 15% of grant funding. The decision, announced Friday by the Office of Policy for Extramural Research Administration (OPERA), is part of a broader effort to direct more funds toward actual scientific research rather than administrative costs.
Indirect funding covers essential operational expenses, including lab maintenance, equipment, utilities, and research personnel salaries. In fiscal year 2023, the NIH allocated $9 billion of its $35 billion total research budget toward these costs. The new cap is expected to save $4 billion annually.
How the NIH Justifies the Cuts
In its announcement, OPERA compared NIH’s indirect cost policy to that of private research funders, such as the Robert Wood Johnson Foundation, the Carnegie Corporation of New York, and the John Templeton Foundation, which typically limit indirect costs to 10-15%.
“The United States should have the best medical research in the world. It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead,” the NIH wrote in its guidance.
Researchers Sound the Alarm
Scientists and university administrators quickly criticized the decision, warning that limiting indirect funding could devastate research operations.
Michael Eisen, a biologist at the University of California, Berkeley, explained that while indirect costs can seem excessive, they are necessary for sustaining research facilities.
“The indirect system makes sense on a certain level. You have to support the infrastructure of a place. I can’t erect a new building every time I get a research grant,” Eisen said.
Former Harvard Medical School Dean Jeffrey Flier was even more blunt, calling the decision “insane” in a post on X (formerly Twitter):
“A sane government would never do this.”
What Are Indirect Costs, and Why Do They Matter?
When a scientist receives a federal NIH grant—for example, $500,000 per year—the institution that houses the research typically receives an additional percentage to cover indirect costs, such as:
- Lab space and maintenance
- Utility bills (electricity, HVAC, water, etc.)
- Research personnel salaries
- Equipment and operational expenses
Under previous policies, indirect cost rates were negotiated between the NIH and each institution, often reaching 27-28% or higher. The new cap significantly reduces that funding, shifting the burden of research support onto universities.
Concerns Over Research Funding and University Budgets
Many scientists fear that universities cannot absorb these financial losses, which could lead to:
- Reduced funding for labs and equipment
- Fewer research opportunities for graduate students and postdocs
- Delays or cancellations of critical biomedical studies
Eisen criticized the NIH for implementing a drastic policy without a thoughtful restructuring of the grant system.
“I understand the sentiment to look at universities and say, ‘The administrations have grown massively, there’s deans all over the place, and there’s money going into this nebulous void. Why should taxpayers be paying for that stuff?’” Eisen said.
However, he called the NIH’s approach “crude” and “poorly thought out.”
“Most universities don’t have the funds to step in and cover this. It’s not viable.”
Political and Institutional Reactions
The funding cuts have sparked political debate, with supporters claiming they eliminate wasteful spending and opponents warning of serious damage to scientific innovation.
Katie Miller, a Trump administration appointee to the Department of Government Efficiency (DOGE), celebrated the move, claiming it targets bloated university budgets.
“President Trump is doing away with Liberal DEI Deans’ slush fund. This cuts just Harvard’s outrageous price gouging by ~$250M/year,” Miller wrote in a post on X.
Meanwhile, the NIH is currently without a confirmed director, and Stanford professor Dr. Jay Bhattacharya, Trump’s nominee for the role, has yet to face Senate confirmation hearings.
Eisen predicted the NIH funding cuts will be a major topic during Bhattacharya’s confirmation hearings.
“Certainly, this is going to come up.”
Potential Consequences for U.S. Research
If the new 15% cap on indirect costs remains in place, scientists warn that it could:
- Discourage top researchers from seeking NIH grants
- Reduce funding for early-career scientists
- Hinder medical advancements in areas like cancer, genetics, and infectious diseases
Eisen summarized the broader impact:
“This is going to have a bad effect on research. If you don’t want research to happen, you can accomplish it this way.”
What’s Next?
- Universities and research institutions may lobby Congress to reverse or modify the NIH decision.
- Researchers may shift focus to private grants, though these typically offer less funding.
- NIH leadership may refine the policy, depending on public and political response.
For now, scientists and policymakers remain divided, as the future of federal research funding hangs in the balance.
NIH Cuts Indirect
You must Register or Login to post a comment.