11. Department of Education · Notable · Needs Congress
Cap the indirect cost rate paid to universities
Printed page 355 11. Department of Education
“Congress should cap the indirect cost rate paid to universities so that it does not exceed the lowest rate a university accepts from a private organization to fund research efforts.”
What has happened
- Attempted
The First Circuit affirmed the vacatur of the NIH cap, holding that "NIH's attempt, through its Supplemental Guidance, to impose a 15% indirect cost reimbursement rate violates the congressionally enacted appropriations rider and HHS's duly adopted regulations". Congress has therefore moved the other way on this ask: the Labor-HHS appropriations rider forbids deviating from negotiated indirect cost rates, and no bill in the 119th Congress caps them. The Status stays `attempted` rather than `blocked` because the ask is addressed to Congress, and no court order stops Congress from acting.
- Attempted
Executive Order 14332 §4(b)(iii) tells the senior appointees who now review every discretionary award that "all else being equal, preference for discretionary awards should be given to institutions with lower indirect cost rates". A scoring preference is not a cap, and it applies to award selection rather than to the reimbursement rate, but it is the surviving federal instrument pushing in the Quote's direction.
- Attempted
The executive branch tried to do by guidance what the Quote asks Congress to do by statute. NIH's Supplemental Guidance to the 2024 Grants Policy Statement set "a standard indirect rate of 15% across all NIH grants ... in lieu of a separately negotiated rate", effective immediately for new and existing awards; the Department of Energy, the National Science Foundation and the Department of Defense issued equivalent 15 percent policies over the following months. This is an executive workaround of a Requires-Congress ask (playbook §3b), and the cap it sets is a flat rate rather than the Quote's "lowest rate a university accepts from a private organization".
Research log
What was searched, and what didn’t count as evidence
Research notes
- Parallel challenges to the NSF, Department of Energy and Department of Defense 15 percent policies are known to us as federal court dockets (CourtListener) and are leads, not Evidence (the docket pages would not open for us): Association of American Universities v. National Science Foundation (D. Mass. 1:25-cv-11231, filed 2025-05-05), Association of American Universities v. Department of Energy (D. Mass. 1:25-cv-10912, filed 2025-04-14; 1st Cir. 25-1727), Association of American Universities v. Department of Defense (D. Mass. 1:25-cv-11740, filed 2025-06-16; 1st Cir. 25-2184).
- Negative search on Congress: a search of the titles of the bills we keep and search for “indirect cost” returns nothing, and the Federal Register carries no rulemaking capping university indirect cost rates.
- Action
- restrict
- Object
- University research indirect cost rate
- ID
- 892