NIH cuts indirect cost rates to 15% for new and existing grants
grants.nih.govThis is a huge cut. Back of the envelope calculations for UCLA (a big research university with public finance information): $200M cut in operating revenue.
In 2023, UCLA had $270M in indirect costs [1] and they negotiated a rate of 57% with the NIH [2]. So, they had about $473M in direct costs. The new rate would be 15%, which is ~$71M. $270M-$71M = $200M.
[1] Page 24: https://ucla.app.box.com/v/acct-pdf-AFR-22-23 [2] https://ocga.research.ucla.edu/facilities-and-administrative...
Will the institutional endowments agree to meet the gap from investment money? Or, is this moving to student-pays by increased tuition costs?
I haven't been in the grants game for decades. It truly amazed me what capitation fee a US institution expected to apply to a joint application (I was in industry at the time) and since it was US funding it basically consumed 2/3 of the grant. We didn't go ahead.
The rationale which I got was "it's our brand which got you the money, it's our brand on the line" -the first part wasn't true but arguably the second part was.
A lot of these institutions don't have that much or any student tuition to increase. For example UCSF has $51 million in tuition revenues and $1800 million in grants per year.
This is huge cut (saving about 4 billion USD a year). I wonder how it is going to affect the quality of research outcomes. It might actually improve research if it reduces the amount of time researchers spend on administrative duties directly because there are less administrations.
If you think this will affect administration and not the support staff, I have a bridge and some tasty oil to sell you.
This is crazy. Effectively a $4 billion cut to existing university budgets!?!?