The National Institutes of Health (NIH) on Friday made a significant reduction in grants reserved for research institutions, a decision that may significantly impact American higher education.
The NIH said it provided over $35 billion in grants to more than 2,500 institutions in 2023, announcing that it will now limit the amount granted for “indirect funding” to 15 percent. This funding helps cover universities’ overhead and administrative expenses and previously averaged nearly 30 percent, with some universities charging over 60 percent.
The change will take effect on Monday, and will save roughly $4 billion annually, per the NIH.
A directive issued from the department argued that its funds should go toward direct scientific research rather than administrative overhead.
“The United States should have the best medical research in the world. It is accordingly vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead,” it stated.
Reacting to the development, the Association of Public and Land-Grant Universities said this decision would limit medical breakthroughs that cure cancer.
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