The Spritzler Report is funded entirely by the National Institute of Health. They don't pay me a dollar over my direct costs except for a Gulfstream G800 which I use only for news-related business and vacations.
BTW, G800 cruises at Mach .85 and has the best fuel economy in it's class.
Seriously, folks the author is probably right. University-conducted scientific research is a huge winner for our economy. Smart to figure out a fair way to keep a good thing going.
A Compromise on University Funding
The 15% research cost cap is too strict, but there’s a solution.
By Maya Sen
Feb. 24, 2025 4:48 pm ET
Medical researchers from universities and the National Institutes of Health protest federal budget cuts in Washington, Feb. 19. Photo: John McDonnell/Associated Press
The Trump administration’s announcement that the National Institutes of Health would cap “indirect costs” for its federal grants at 15% sent shock waves through academia. University research depends on federal money—11% of Harvard’s operating revenue comes from such grants. But there could be a win-win here for academics and Republicans.
A significant across-the-board cut could imperil research. Akin to a service fee, indirect costs are tacked onto grants to cover the basic costs of conducting research. Because those costs range across institutions, so did what the government provided up until the rule change. Harvard, for instance, negotiated a higher indirect rate of 69% while many institutions in lower-cost areas negotiated lower rates.
The blanket 15% rule ignores any individualized considerations, leaving schools with higher costs in the lurch. Though courts have temporarily blocked part of the change, the issue will likely head to Congress—where the increasingly polarizing nature of universities will be important.
According to a 2024 Gallup poll, the share of Americans who have a “great deal” or “quite a lot” of confidence in universities has plunged 20 points in the last 10 years, with the sharpest decline among Republicans, down more than 30 points. But blunt policies won’t solve the issues driving this decline in confidence.
Many academics admit that the number of nonfaculty staff has grown to uncomfortable levels. A recent report showed that Stanford has roughly one administrator for every student—an unflattering statistic that calls into question higher ed’s priorities. But administrators have proliferated in part because of government requirements that won’t disappear with a funding cap. Universities receiving grants, for instance, must comply with important but costly regulations to protect the safety of human subjects as well as data privacy.
On the other side of the balance sheet, cutting university funding affects more than academics. Research institutions can be local economic engines, creating jobs and driving innovation. The University of Alabama, the state’s largest employer, received $334 million in NIH funds in 2024 alone. Capping indirect costs at 15% would cost it around $70 million a year, shrinking its economic footprint.
There’s a better solution than a blanket cap. Universities could instead commit to addressing administrative bloat and shoring up research integrity—both reasonable points that academics themselves have flagged. Given the choice, many researchers would rather see more money flow to actual research than administration. And adopting replication policies for research findings, already standard in many top academic journals, would bolster integrity.
Indirect cost rates of 70% are likely a thing of the past, but smart maneuvering could give universities a win, hand Republicans a victory, and keep vital research on solid footing.
Ms. Sen is a professor of public policy at Harvard’s Kennedy School of Government.
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