National Institutes of Health Cuts Research Funding

As the leading funder of biomedical research in the world, NIH reductions also include cutting supplies like HVAC and microscopes.

February 11, 2025

On Friday, the National Institutes of Health (NIH)’s director lowered the maximum “indirect cost rate” that researchers can charge the federal government.

NIH awards many grants providing substantial federal funding for research purposes. NIH spent more than US$35 billion in fiscal year 2023 on almost 50,000 competitive grants to over 300,000 researchers at more than 2,500 universities, medical schools, and other research institutions nationwide, the agency said. Of this funding, approximately $26 billion went to direct costs for research, while $9 billion was allocated to overhead through NIH’s indirect cost rate.

When the NIH awards a grant to a scientist, an additional percentage of that award is provided to the scientist’s institution to pay for infrastructure that supports the research, such as lab equipment, utilities, hazardous waste disposal, HVAC, microscopes, and more.

NIH reported its indirect cost rate averaged between 27% and 28%. On the other hand, most private foundations that fund research provide substantially lower indirect costs than the federal government, the agency said. For example, NIH cited a study that found the most common rate of indirect rate reimbursement by foundations was 0%, meaning many foundations do not fund indirect costs whatsoever.  In addition, many of the nation’s largest funders of research—such as the Bill and Melinda Gates Foundation—have a maximum indirect rate of 15%.  And in the case of the Gates Foundation, the maximum indirect costs rate is 10% for institutions of higher education, NIH reported.

In turn, NIH imposed a standard indirect cost rate on all grants of 15%. This policy shall be applied to all current grants for go forward expenses from Feb. 10, NIH said.

Scientists, doctors, and researchers said NIH cutting the funding so abruptly is devasting for research, which has been vital to making new healthcare discoveries, CNN reports. Slashing the budget also will threaten jobs and regional economies that depend on funding, The Washington Post reported. In addition, NIH is the leading funder of biomedical research in the world and supports 412,000 jobs, according to United for Medical Research.

The abruptly lowered indirect cost rate is illegal under the Labor-HHS-Education Appropriations Bill, U.S. Senator Patty Murry of Washington said. University lawyers also are likely preparing a legal challenge, Morning Brew reported.

Tags

Latest Articles

Jeff Carmon
January 19, 2026 Jeff Cross

The Hidden Roadblock in Cleaning Contracts: Internal Alignment

January 19, 2026 Allen P. Rathey

Using Robotics for Competitive Advantage

January 16, 2026 Jeff Cross

Cognitive Offloading and the Cost of Letting AI Decide

Sponsored Articles

Tru-D Care
January 7, 2026 Sponsored by Tru-D

Inside Tru-D SmartUVC: The Importance of Service and Upkeep for UVC Disinfection

January 7, 2026 Sponsored by PDI

One Wipe. One Minute. One Solution. PDI Raises the Standard for Infection Prevention

December 15, 2025 Sponsored by Novonesis

Inside the Art of Cleaning—and What Happens When It Fails

Recent News

Washington D.C.

New MOLD Act Strengthens Health & Safety Standards for Military Housing

EPA Launches Voluntary Soil Sampling of Residences Affected by Eaton Wildfire

US Reverses Job Cuts at Safety Research Agency