NIH Cuts Absorbable Without Hobbling Research in Higher Education: Policy Experts

Dozens of prestigious universities sounded the alarm after the National Institutes of Health (NIH) capped overhead costs of taxpayer-funded research grants at 15 percent to reduce government spending.

These cuts undermine decades of progress in cancer, Alzheimer’s, and diabetes research, higher education officials announced. Jobs will be eliminated, fewer doctorate students will be admitted to top learning institutions, and marginalized communities will suffer, they said.

A growing list of elite schools, most of them private and some regular recipients of NIH awards covering 60-plus percent of overhead costs for research projects, issued statements against President Donald Trump’s Feb. 7 directive or joined one of three lawsuits challenging the move. A federal court order temporarily blocked the cuts.

“America’s rivals will cheer the decline in American leadership that the guidance threatens.”

Higher education policy experts say the cuts are not aimed at the boots on the ground that are looking into microscopes, documenting scientific observations, or working with animal specimens in laboratories.

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Instead, many of the capped indirect costs for facilities and administration—utilities, janitorial services, depreciation and interest on debt for existing facilities and equipment, and payroll and personnel management—are often expenses schools already incur regardless of the research project.

Scott Turner, director of science for the National Association of Scholars, told The Epoch Times that direct funding for NIH research projects increased by several billion dollars in the 2025 budget.

“Laying employees off, cutting PhD admissions—that’s aggressive compliance,” he said. “But if you really get into the budget numbers, you can free up to $10 billion more to do research.”

Turner said the most logical cuts that don’t impact actual research are six-figure salaried administrators, like directors of institutional advancement, student success, or diversity, brought aboard by those indirect revenues even though they had little to do with the original purpose or work of the federally funded projects.

In the wealthiest universities, he added, teams of accomplished research directors become full-time grant writers in a competitive process where about 20 percent of proposals nationally get funding. These institutions have far more leverage than smaller schools to negotiate higher indirect rates.

NIH, the largest revenue source for biomedical research in the world, notes on its website that it funded about 50,000 competitive grants at more than 2,500 learning institutions for a total of $35 billion in 2023. Of that total, about $9 billion covered overhead expenses through the agency’s indirect rate.

Turner said federally funded indirect research costs were first capped at 5 percent in 1950, but over time, that limit was relaxed to the point where schools could negotiate the rate with NIH during the grant application process.

“Indirect cost payments are a hidden enabler of university overexpansion,” she wrote.

“The university advocates have been invoking complex medical research to justify high indirect cost rates. But the NIH funds social science projects as well, especially in the area of structural racism and health equity.”

In 2023, the school received $3 million to count “sexual and gender minorities” not tallied in the last U.S. Census. Nothing in the project description indicates this is complex scientific research requiring specialized equipment, additional facilities, or significant staffing. The indirect cost for this, which appears to be pure surplus, was $907,660, or 30 percent of the project total.

Stanford is also a plaintiff in a lawsuit against the federal government.

“Without this sustained support, we risk slowing—if not halting—crucial research with the potential to improve millions of lives,” Lloyd Minor, Stanford’s vice president for medical affairs, said in a Feb. 12 news release.

Mac Donald of the Manhattan Institute agrees that regulatory measures, though well-intended, have become bureaucratic over time. Universities manipulated the situation and funneled the salaries and benefits of added administrators into the growing indirect cost tab, she said.

“The growth of the bureaucracy and of wholly unneeded functions has occurred in tandem with the infusion of vast sums of untraceable money into the academic ecosystem,” Mac Donald said in an email response to The Epoch Times. “Given the fungibility of money, the existence [of indirect costs funding] takes pressure off other funds in the system. The bloat is simultaneous and ubiquitous. “

The Massachusetts Institute of Technology announced both a hiring freeze and a reduction of graduate admissions across several departments.

He also predicts more than “a trillion dollars” in philanthropic money will soon appear to help universities absorb the NIH cuts.

Mac Donald said it’s easy enough to eliminate indirect expense payments from federal grants.

“If universities want to make the case that American taxpayers should provide them an untraceable subsidy for virtually the entirety of their operations, let them do so,” she wrote.

“We are aware,” the release said, “that diverting resources to fund this initiative will necessarily mean less resources are available to address other areas of our work and operations.”

Turner was previously a professor and researcher at SUNY Environmental Science and Forestry in Syracuse, N.Y., where he received NIH grants to study blood flow in reptiles, bird egg incubation, and termite mounds.

As with other researchers across the country, Turner’s projects began as a vehicle to satisfy his curiosity but resulted in contributions to science and medicine that benefit living organisms.

While he criticizes siphoning research money to other university functions, Turner hopes that NIH reforms will encourage new ideas and scientific diversity.

“Big termite mounds might not sound like much, but maybe it leads to other breakthroughs,” he said.

“How do you tell what’s necessary and what’s not? Curiosity-driven research was the purpose, not pseudo-industrial research labs.”