Congress, Courts Stymie Trump's Effort to Cap Research Costs

"The National Institutes of Health and other federal agencies can't make any changes to how universities are reimbursed for costs indirectly related to research until at least Sept. 30, under the recently passed budget bills that President Trump signed into law. The legislation ends a yearlong effort from the Trump administration to cap reimbursements for indirect research costs at 15 percent. The average reimbursement rate for institutions is 27 to 28 percent, though some colleges have negotiated reimbursement rates greater than 50 percent."

"When the NIH announced Feb. 7, 2025, that it would cap the rates, colleges and universities warned they would have to cut costs or research operations to make up the difference. The funding for indirect costs helps to pay for hazardous waste disposal, utilities and patient safety. The rate cap would've saved about $4 billion, the NIH said. But lawsuits quickly led to court orders that blocked the NIH from capping the rates."

Congress prevented the National Institutes of Health and other federal agencies from changing how universities are reimbursed for indirect research costs until at least Sept. 30, preserving existing rates for fiscal year 2026. The budget bills signed into law stopped a Trump administration plan to cap reimbursements at 15 percent; the average institutional reimbursement is about 27–28 percent, with some exceeding 50 percent. The NIH said a 15 percent cap would have saved about $4 billion, and colleges warned they would need to cut costs or research operations. Lawsuits and court orders already blocked agency actions, litigation continues, and legislation directed agencies to work with universities to explore improvements to the funding model.

Read at Inside Higher Ed | Higher Education News, Events and Jobs