Since a lot of people on HN don't know how indirect costs work, especially for the NIH:

Grant proposals don't cover things that don't directly cover the project. Journal subscriptions, facilities, copy paper, administrative staff, etc. all aren't eligible, and so get rolled into the vague notion of indirect rates.

When an NIH grant is awarded for a particular direct cost amount, the indirect rate is then added on. So for my institution, if I get a $100,000 grant, my institution gets $153,000, because we have a 53% indirect rate. These are periodically renegotiated with the Federal government, and used widely.

Private research companies can and do just tuck this into their costs, but universities aren't allowed to do that.

A 15% rate is, to be blunt, catastrophic. It's "Every University in the U.S. Loses Money on Every Single NIH Grant" levels of bad.

And yes, this is the rate a lot of foundations charge. That's not because it's a reasonable rate - it's because it's a charitable foundation, and we all sort of indulge them because of their missions, and their own need to be efficient. But they're also a minuscule amount of the funding landscape, and often small grants. We tell ourselves its find - they're worthy causes, and loss leaders, etc. But applying that to the NIH will be a massive blow to biomedical research in the United States.

This 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...

(Reposting from a less popular posting)

https://bsky.app/profile/joshtpm.bsky.social/post/3lhmxzwceq...

"From what I hear from multiple people in the space, the latest NIH indirect costs for medical research grants will basically mean the end most academic medical centers"

This is a pointlessly destructive move that will save insignificant amounts of money, while grossly hampering important research in the US. If we're looking for "efficiencies" in government take a look at healthcare, look at what insurance companies are allowed to charge, what hospitals charge insurance in turn. It's a bonanza of cash that's justified in vague free market terms, while the taxpayer is stuck with a bill in the trillions. Far more than education or NIH grants, more than military spending, healthcare in this country simply robs people blind. The focus is often on bankrupted, uninsured people, but the truth is that far more is just skimmed off the top.

The worst part is that it is immediate and retroactive to ongoing grants. This will immediately cause every single academic and medical research center to have an unsustainable deficit. It will simply cost too much to actually have researchers do the grants. They might return money to NIH and lay off faculty annd grad students.

I anm almost certain this will get a TRO from a federal judge while it’s litigated given how insane this is.

https://bsky.app/profile/kgandersen.bsky.social/post/3lhmscc...

"This will be the end of American excellence in science.

Universities will struggle and many (likely most) will terminate their research programs.

Independent research institutions will not be able to survive this."

The overhead being charged at a lot of these places was obscene (and variable- it all depended on the specific institution). A fixed rate of 15% seems low, but reasonable. I expect the admin especially at places that charge a premium will be furious.

Is it possible that this is being done to increase private influence over public research? Private entities could simply raise their cap on indirect costs...if conditions are met.

University administrations are extraordinarily bloated and badly in need of cuts. Glad to see this happening.

About time. Research foundations like Gordon and Betty Moore Foundation rarely allow more than 15-20% in overhead from grantees.

Research universities are bloated and epically inefficient, and hopefully soon go the way of Blockbuster.