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1 1 (March 3, 2025)

handle is hein.crs/govespq0001 and id is 1 raw text is: NIH Indirect Costs Policy for Research Grants: Recent Developments March 3, 2025 On February 7, 2025, the National Institutes of Health (NIH), an agency of the Department of Health and Human Services (HHS), published supplemental policy guidance that instituted a 15% indirect cost rate for NIH grants. The policy applies to any new grant awards. The policy applies, as well, to all existing grants to institutions of higher education (IHEs) for the reimbursement of expenses incurred from February 10, 2025, onward. Indirect costs represent expenses that are not specific to a research project and that maintain the infrastructure and administrative support for federally funded research. On February 10, 2025, a U.S. District Court judge issued ex parte temporary restraining orders (TROs) enjoining the policy's implementation in two cases, one brought by 22 states and one brought by associations of research institutions. The latter TRO bars application of the policy change to institutions nationwide. This TRO was extended on February 21, 2025. As those proceedings continue, Congress could consider whether and how to respond to this policy change through oversight or legislation. NIH is the leading federal agency for biomedical and health research. Nearly 83% of NIH's budget (total budget was over $47 billion in FY2024) supports extramural research and training programs performed by nonfederal research institutions such as universities and medical centers, mostly through grants. NIH budget data show that out of $33.8 billion awarded in FY2023, 27.8%, or $9.4 billion, went toward indirect costs. Capping the indirect cost rate to 15% would likely decrease the amount of indirect costs research institutions can recover from NIH. One often cited NIH social media post estimated that the policy change would save NIH more than $4 billion per year. Understanding Indirect Costs for Research Grants Indirect costs, also called facilities and administrative costs (F&A), represent costs that cannot be easily attributed to an individual research project (e.g., costs associated with the operation and maintenance of research facilities, library expenses) and administrative services (e.g., accounting, payroll, and purchasing). In contrast, direct costs consist of researcher salaries, equipment, supplies, and other expenses that directly support or benefit an individual research project. Because indirect costs cannot be easily attributed to a specific research grant, they are charged using an indirect cost rate applied to a certain portion of the direct costs for each research grant awarded. A federal research award comprises funding for both direct and indirect costs. Congressional Research Service https://crsreports.congress.gov IN12516 CRS INSIGHT Prepared for Members and Committees of Congress

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