NIH reduces absorption without hobling research in higher education: policy experts

Dozens of honorable universities have issued warnings after the National Institutes of Health (NIH) reduced government spending by limiting the overhead costs of taxpayer-funded research grants to 15%.

These reductions undermine decades of progress in research into cancer, Alzheimer’s and diabetes, higher education authorities have announced. Employment will be eliminated, doctoral students will be hospitalized less in small learning institutions, and marginalized communities will suffer.

The ever-growing list of elite schools, most of which are private and regular recipients of the NIH Award, covering more than 60% of the overhead costs of research projects, has joined in one of three lawsuits that either issue a statement against President Donald Trump’s February 7 directive or challenge him to move. A federal court order temporarily blocked the cuts.

“American rivals support the decline of American leadership, as guidance threatens.”

Higher education policy experts say the cut doesn’t aim for ground boots looking for microscopes, documenting scientific observations, or monitoring the manipulation of laboratory animal specimens.

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Instead, many of the indirect costs of the cap for facilities and management (cleaning services, cleaning services, depreciation and interest on existing facilities and equipment obligations, and salaries and personnel management) are often at costs that the school is already incurring regardless of the research project.

Scott Turner, director of science at the National Association of Academic Scholars, told the Epoch Times that direct funding for the NIH research project has increased by billions of dollars in the 2025 budget.

“We fire employees and cut down on doctoral degrees. That’s aggressive compliance,” he said. “But when you actually get into the budget number, you can free up to $10 billion for free to do your research.”

Turner said the most logical cuts that do not affect actual research were six-figure pay managers, such as institutional promotions, student success, or diversity directors, falling into indirect revenue despite having little to do with the original purpose or job of the federal funding project.

He added that at the wealthiest university, a team of skilled research directors will become full-time grant writers in the competitive process where around 20% of the proposals will be funded nationwide. These institutions have far more leverage than small schools to negotiate higher indirect rates.

The world’s largest revenue stream of biomedical research, NIH pays on its website about 50,000 competitive grants from over 2,500 learning institutions totaling $35 billion in 2023, covering overhead fees covered through indirect fees of around $9 billion.

Turner said that indirect federally funded research costs first concluded in 1950 at 5%, but over time the restrictions were eased to the point where schools could negotiate rates with the NIH during the grant application process.

“Paying indirect costs is a hidden enabler of university overinflation,” she writes.

“Universities are calling complex medical research to justify high cost rates with indirect cost rates. However, the NIH funds social science projects, particularly in the areas of structural racism and health equity.”

In 2023, the school received $3 million to count “sexual and gender minorities” that were not tallied in the last US census. Nothing in the project’s description indicates that this is a complex scientific study that requires specialized equipment, additional facilities, or critical staffing. The indirect cost of this, which appears to be a pure surplus, was $907,660, or 30% of the project’s total.

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

“Without this sustainable support, we risk slowing down important research that has the potential to improve millions of lives.”

Mac Donald of the Manhattan Institute agrees that, although intended, regulatory measures have become bureaucratic over time. The university manipulated the situation and poured the added admin pay and profits into the growing indirect cost tab, she said.

“The growth of bureaucracy and completely unnecessary functionality occurred in parallel with the huge injection of huge amounts of money into the academic ecosystem,” Mac Donald said in an email response to the Epoch era. “Given money dependency, the existence of (indirect cost financing) puts pressure on other funds in the system. Blurification is ubiquitous at the same time.”

The Massachusetts Institute of Technology has announced both a job freeze across several sectors and alumni admissions cuts.

He also predicts that more than a trillion dollars in charity funds will appear to help the university absorb NIH cuts.

Mac Donald said it’s easy to eliminate indirect costs from federal grants.

“If universities want to argue that American taxpayers should provide untraceable grants for virtually their entire business, let them do so,” she wrote.

“We are aware,” the release states, “by diverting resources to fund this initiative necessarily means that there are fewer resources available to address other areas of our work and operations.”

Turner was previously a professor and researcher of SUNY Environmental Science and Forestry in Syracuse, New York, and received a NIH grant to study reptiles, bird egg incubation and termite mound blood flow.

Like other researchers across the country, Turner’s project began as a means to satisfy his curiosity, but brought contributions to science and medicine that benefited living things.

He criticizes siphoning research funding into the functions of other universities, but Turner hopes that NIH reforms will encourage new ideas and scientific diversity.

“Big termite mounds may not sound much, but they could probably lead to other breakthroughs,” he said.

“How do you communicate what you need and what you don’t need? Curiosity research was the purpose, not the pseudoindustry lab.”