ANN ARBOR, Mich. (Michigan News Source) – The University of Michigan projected it would take in $398 million in what is defined as “indirect cost recovery” in 2024-25 to overhead and administration on its grants and contracts it receives for research.

That money is part of a national conversation since the National Institutes of Health (NIH) said it wanted to put a cap on what academia could charge for “indirect costs.” The NIH revealed colleges were charging the government far more than private foundations.

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The NIH said it is implementing a 15% cap at 15% on how much academia can assign to pay for indirect costs. The NIH stated that private foundations set ceilings on how much of their money in research grants can be used for indirect costs and it ranges from 10% (Gates Foundation) to 15% (Chan Zuckerberg Initiative). The NIH said the average cost recovery on its grants is 27% to 28%. The University of Michigan’s rate was 56%, double the average.

University of Michigan’s indirect cost revenues have increased 42% going from $279.6 million in 2018-19 to this year’s $398 million. The University of Michigan Office of Research has 13 employees who make $200,000 or more in 2024-25. Arthur Lupia, the vice president of the department, was the highest paid at $317,598.

The NIH stated that a recent study found that 67 of 72 universities were willing to accept research grants that came with 0% indirect cost coverage. The NIH stated that the University of Michigan was only one of three of the 72 universities that refused to accept indirect costs rates lower than the federal rate.