Universities across the United States are working on a new plan to improve how research funding works. This major change comes after the National Institutes of Health (NIH) tried to reduce the money universities get for indirect research costs. That move caused concern in many schools, and now colleges want to take the lead in creating a better system.
This effort is led by a team called the Joint Associations Group (JAG), which includes 10 higher education organizations. They believe that if they don’t act now, the government will make changes without their input. Their goal is to create a fair and simple model that helps schools and researchers, while still meeting government expectations.
Why Universities Want a New Funding System
The current system for federal research funding gives money for both direct costs (like lab equipment and salaries) and indirect costs (like electricity, building maintenance, and security). But the indirect costs are not well understood by the public or lawmakers. In February, the NIH proposed a cap of 15% for indirect costs, which is much lower than the current average of 28%. This could lead to a $4 billion cut for university-based research.
Key reasons for creating a new model include:
- Avoiding major budget cuts for research institutions
- Making the system more transparent and easier to understand
- Protecting jobs and continuing life-saving research
- Avoiding confusion between schools and government agencies
Legal actions have stopped the NIH’s cap for now, but other federal groups like the Department of Defense are working on similar plans. So universities feel it’s urgent to take action before these changes become permanent.
Two New Research Funding Models Proposed
At a recent virtual meeting, JAG presented two possible models, both called FAIR (Fiscal Accountability in Research). These models aim to show the true cost of research more clearly and remove terms like “indirect costs” and “overhead,” which can be confusing.
1. FAIR Model No. 1
This model would apply a fixed percentage to the entire research budget, based on the type of university and the research being done. It includes costs for running the research, managing the grant, and maintaining buildings. This system would be simpler and faster, but it might not fit well with all research types.
2. FAIR Model No. 2
This version would split the costs into two parts:
- Essential support (like lab workers and supplies) would be included in the main project costs.
- General operations (like payroll and purchasing) would be charged as a fixed rate.
This model would be more accurate but harder to set up. Schools may need to change how they track their spending. However, it would give a clearer picture of where the money goes, something Congress has asked for.
JAG says the final model will likely be a mix of both ideas.
How Universities Are Working with the Government
The JAG team is asking for feedback from the university community by June 22, with plans to send their final proposal to Congress and the Trump administration by June 27.
Kelvin Droegemeier, a professor and JAG leader, says they’ve already met with lawmakers and White House officials, including the Office of Management and Budget (OMB). So far, the response has been mostly positive.
Support for the models is growing:
- Senator Susan Collins praised the plan in a recent hearing.
- NIH Director Jay Bhattacharya called the proposals “quite promising.”
- A new House bill asks the Department of Defense to work with universities on a fair cost-sharing model.
What This Means for the Future of Research
This is a key moment for U.S. research. If universities succeed, they could shape how billions of dollars are spent in the coming years. If they don’t act now, they risk having a plan forced on them that may harm research and innovation.
“This is about keeping America a world leader in science and innovation,” said Matt Owens, head of the Council of Government Relations. “We must meet this challenge together.”
Deborah Altenburg, vice president at the Association of Public and Land-grant Universities, added, “It’s a big change, but we’re responding to a new political reality.”
Stay tuned for more Breaking News and Daily news highlights as universities work to protect science, jobs, and innovation through smarter funding systems.
