LANSING, Mich. (Michigan News Source) – U.S. District Court Judge Angel Kelley, a federal judge nominated by former President Joe Biden, temporarily halted Tuesday an attempt by the Trump administration to reign overhead costs for academic research.
What triggered the ruling?
As reported by numerous news sites, Kelley made her ruling and supported a lawsuit led by Michigan Attorney General Dana Nessel along with 22 other attorneys general suing the Trump administration.
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What triggered the legal action was the National Institutes of Health (NIH) saying it is putting a cap on what academia can charge for overhead at 15%.
The NIH said that it is reasonable, considering some private foundations don’t charge for indirect costs at all and the Gates Foundation (10%) and the Chan Zuckerberg Initiative (15%) have capped what grantees can charge for indirect costs at 15% or less.
Harvard University charges the government 69% of the money it receives for research to cover “indirect costs,” also known as “overhead charges.”
Yale is 67.5% and Johns Hopkins is 63.7%.
The cap raises questions.
It raises the question to why colleges are charging government significantly more for overhead costs than what private foundations are willing to pay. The NIH said that a recent study found that many private foundations don’t pay any of the indirect costs for the research they fund.
In 2023, the NIH gave out about 50,000 grants totaling $35 billion and $9 billion was spent on indirect costs. The average indirect costs has been 27% to 28%, the NIH stated.
Michigan gets involved.
On Tuesday, Nessel led a lawsuit along with 22 other attorneys general, claiming the cuts would hamper research.
The attorney general’s office said the 15% cap on indirect costs was “significantly less than the cost required to perform cutting edge medical research.”
“Indirect cost reimbursements are based on each institution’s unique needs, negotiated with the federal government through a carefully regulated process, and then memorialized in an executed agreement,” Nessel stated in a press release. “These dangerous proposed cuts are indiscriminate and without purpose. “They will cost jobs here in Michigan and will hamper tens of thousands of research projects – many of which are currently underway and focus on improving health outcomes and preventing death. I’m proud to lead this effort to restore this essential funding.”
The attorney general’s office stated that this would include $200 million in funding cuts that support research projects at the University of Michigan, Michigan State University and Wayne State University.
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