- Several attorneys generals are suing the Trump administration. They’re asking a federal judge to put a temporary pause on the NIH’s decision to set a 15% cap on payments for indirect costs.
- The attorneys general said the cuts will impact universities and research institutions across the country.
- The Trump administration said the cuts will save the government $4 billion per year.
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Attorneys general in 22 states are suing the Trump administration, asking a federal judge to temporarily block a major policy change by the National Institutes of Health. The new policy cuts billions of dollars in grant funding to universities and research institutions across the country.
In the lawsuit, filed Monday, Feb. 10, in U.S. District Court for the District of Massachusetts, the attorneys general claim the NIH’s decision to set a 15% cap on payments for indirect costs would cause major harm to institution budgets, jeopardizing basic operations and medical research.
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“NIH’s extraordinary attempt to disrupt all existing and future grants not only poses an immediate threat to the nation’s research infrastructure, but will also have a long-lasting impact on its research capabilities and its ability to provide life-saving breakthroughs in scientific research,” the attorneys general wrote.
What is the Trump administration saying about the policy change?
While critics see the Trump administration’s decision as an attack on science, the Trump administration says the policy change is an effort to get rid of wasteful spending.
In its announcement Friday, NIH said on average, the overhead rate has been about 27%-28% of the direct research funding in the grant but that many organizations charge indirect rates of over 50% and in some cases more than 60%. It added that $9 billion of the $35 billion in research grants distributed last year had gone to overhead and the move would save the government $4 billion per year.
Last year, $9B of the $35B that the National Institutes of Health (NIH) granted for research was used for administrative overhead, what is known as “indirect costs.” Today, NIH lowered the maximum indirect cost rate research institutions can charge the government to 15%, above… pic.twitter.com/FSUYpEGKsr
— NIH (@NIH) February 7, 2025
It’s not clear if those savings would be passed on to increase direct research funding.
The lawsuit also argues the change violates congressional appropriations law, which has prohibited the NIH from altering indirect cost rates without proper authorization since 2018.
How are researchers responding to the policy change?
Some universities are responding to the move.
The University of Wisconsin-Madison put out a statement arguing the new indirect cost cap will “significantly disrupt vital research activity and daily life-saving discoveries.” It added the move will also “have an inevitable impact on student opportunities to engage in research activities.”
The University of Michigan put out a statement emphasizing the “great deal of uncertainty” over how the policy will be implemented.
The school said it started investigating the implications of this new rule on its current grants.
DOGE praises the move by the NIH
The Trump administration’s Department of Government Efficiency, led by Elon Musk applauded the move in a post on X.
“Amazing job by the NIH team,” the post said.
Amazing job by @NIH team.
— Department of Government Efficiency (@DOGE) February 7, 2025
Saved > $4B annually in excessive grant administrative costs. https://t.co/ICLlcJxp8V
The NIH has not commented further on its decision or the new lawsuit.
