The National Institutes of Health (NIH) has made a significant change to how it funds research. Recently, they announced that they will reduce the support for “indirect costs” for universities and medical centers. Indirect costs cover essential expenses like administration and facilities, which are crucial for research operations but not directly linked to specific projects.
Historically, the NIH funded indirect costs at about 27% of research grant budgets. Now, that rate will drop to 15% for both new and existing grants. This cut is particularly tough on top research universities, which usually receive rates higher than 50% for those costs.
This change comes as part of NIH’s efforts to allocate funds more effectively. In the 2023 fiscal year, the NIH spent $35 billion on research grants, with $9 billion going towards indirect costs. By cutting this support, the government aims to save around $4 billion annually.
The impact of this decision will be felt across the research community. It raises questions about how universities will adapt to this funding shift and what it means for the future of various research projects.
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