15% Cap on Indirect Costs in NIH Grants.
In Notice Number NOT-OD-25-068: Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect Cost Rates (February 7, 2025), the National Institutes of Health (NIH) imposed a 15% cap on the "indirect cost" rate for all NIH grants. This policy applies to both new and existing grants, effective from the date of issuance. For institutions of higher education, this standardized 15% indirect cost rate may lead to reduced funding for facilities and administrative expenses, potentially impacting operations that support research and other activities.
Status: Currently blocked by a nationwide temporary restraining order (TRO)
Statements
Statement from the American Council on Education (ACE), the Association of American Universities (AAU), and the Association of Public and Land-grant Universities (APLU). February 10, 2025.
Legal Challenges
This abrupt policy change prompted immediate legal challenges from multiple stakeholders, who argue that the NIH directive poses a substantial threat to the sustainability and advancement of critical research endeavors across the United States. Three separate cases were filed in the U.S. District Court for the District of Massachusetts. The cases are listed below.
The court may eventually decide to consolidate these cases. On February 14, 2025, District Judge Angel Kelley entered an electronic order directing counsel in all three actions "to coordinate and submit a joint statement" in preparation for argument at the TRO hearing scheduled for February 21, 2025 and directing the defendants to submit "a single, consolidated opposition to the Motion for a Temporary Restraining Order."
Case filed by 22 U.S. States. Case filed by the State Attorneys General of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.
- Case citation: Commonwealth of Massachusetts v. National Institutes of Health, 1:25-cv-10338, (D. Mass. Feb 10, 2025)
- On February 10, 2025 the court temporarily blocked implementation of the 15% cap in an order granting the plaintiffs' emergency motion for a temporary restraining order (TRO). This TRO covers only the 22 plaintiff states
- Read the order granting a TRO
- The court set a hearing on the TRO for February 21, 2025
Case filed by medical associations. Case filed by the Association of American Medical Colleges, the American Association of Colleges of Pharmacy, the Association for Schools and Programs of Public Health, the Conference of Boston Teaching Hospitals, Inc., and the Greater New York Hospital Association
- Case citation: Association of American Medical Colleges v. National Institutes of Health, 1:25-cv-10340, (D. Mass.)
- On February 10, 2025, the court granted plaintiffs' motion for a temporary restraining order. This is a nationwide TRO.
Case filed by universities and educational associations. Case filed against HHS and NIH by The George Washington University, Johns Hopkins University, Massachusetts Institute of Technology, Trustees of the University of Pennsylvania, University of Rochester, Trustees of Tufts College, Association of American Universities (AAU), The California Instiitute of Technology, American Council on Education (ACE), Association of Public and Land-grant Universities (APLU), Brandeis University, Brown University, The Regents of the University of California, Carnegie Mellon University, The University of Chicago, Cornell University.
- Case citation: Association of American Universities v. Department of Health & Human Services, 1:25-cv-10346, (D. Mass.)
- On February 10, 2025 plaintiffs filed a motion for a temporary restraining order (TRO)
- Read the motion for the TRO. On February 11, however, the court denied this motion for TRO as moot, referencing the February 10, 2025 nationwide TRO already granted in the above-referenced AAMC et al v. NIH et al case.