The Trump administration’s decision to limit federal funding for research overhead costs is facing strong opposition from colleges, universities and state attorneys general.
Under a directive issued late Friday, institutions receiving funding from the National Institutes of Health can now allocate only 15% of that money toward indirect costs such as rent, building maintenance and lab equipment. The remainder must go directly to research.
The policy, effective today, has drawn criticism from academic leaders in the Boston area and Washington, D.C., who argue it will significantly disrupt medical research efforts.
Massachusetts institutions, which receive substantial NIH funding, are particularly concerned. In a message to affiliates posted online Sunday, Harvard President Alan Garber warned “our nation’s science and engineering prowess would be severely compromised.” Harvard, which currently charges 69 cents in overhead for every research dollar spent, would see that drop to just 15 cents.
At MIT, the announcement caught many faculty members off guard. One researcher told GBH News the policy triggered a “collective freak-out all weekend.” Tufts Medicine responded cautiously, stating that administrators are aware of the directive and remain committed to supporting researchers and patients as they assess next steps.
Ted Mitchell, president of the American Council on Education, said the decision would sabotage U.S. global leadership in medical innovation.
“This is simply giving away our competitive advantage to China and other countries who are hot on our tail in biomedical research,” he said.
Michael Brickman, a fellow at the American Enterprise Institute, supports the funding cap. He said the NIH is still committed to funding critical research, but it makes sense to cut back on overhead costs.
“I think people want to see money for research going to things that are going to improve their lives, improve longevity, make the country stronger, make the economy better,” Brickman said. “But I think a lot of people are surprised to know that the university hosting some of this research just gets a huge cut on top of it for essentially whatever they want.”
A legal challenge
On Monday, Massachusetts Attorney General Andrea Campbell announced she was leading a lawsuit against the new policy , joined by Democratic attorneys general from 21 other states.
“There are laws in place that prevent the president and his administration for damaging ongoing medical research throughout the country,” Campbell said. “The president cannot simply toss these laws aside and put public health and medical advancement at risk.”
Speaking to reporters, Campbell said indirect costs are crucial to research.
“Whether the president believes it or not, funding that covers lab costs, faculty, even graduate students, is a critical part of the research process,” Campbell explained. “They are the wheels that keep the trains on track. Without these indirect cost rates, that train grinds to a halt.”
The NIH is the world’s largest funder of biomedical research, providing more than $35 billion annually. Last year, Massachusetts alone received roughly $3.5 billion in NIH funding for nearly 6,000 research projects.
The first Trump administration previously proposed similar research funding cuts in 2017, but Congress blocked them. Critics argue this latest effort is part of a broader trend of hostility toward higher education and “coastal elites.”
Following a flurry of executive orders targeted at colleges and universities, Mitchell said Trump appointees are behaving in a way that suggests they don’t believe there’s anything worthwhile in academia.
“They’re wrong,” Mitchell said. “Higher education has built and will continue to build America. They need to get out of this myopic mindset of a culture war and get back into the notion of making good policy that will make America safe and prosperous and lead the world.”
Campbell urged her Republican counterparts to join the Democratic-led lawsuit.
“This is an attempt to eliminate funding that supports medical and public health innovation and every research institution in the country,” she said. “This work improves our ability to treat and cure diseases and to have an impact on all of us, no matter what political party you may support.”
