The funding UT Austin and other universities can receive for biomedical research is significantly reduced under a new policy from the National Institutes of Health.
On Monday, the NIH began limiting the amount it reimburses grant recipients for indirect research costs. These are facilities and administration expenses incurred during the course of a project — such as the maintenance and utilities associated with keeping up a state-of-the-art research lab.
Professor John Wallingford runs one such lab at UT Austin. The Wallingford Lab uses NIH funding to study the genetic causes of human developmental disorders, sometimes referred to as birth defects. He said the money the university receives for indirect costs associated with his work covers “a huge amount of research infrastructure.”
“You can't have a big building with 100 researchers in it without janitorial staff and people who keep the lights on,” said Wallingford, who spoke on his own behalf and not on the university’s.
He said the money can also cover his lab’s share of resources that multiple labs use, such as expensive equipment like highly specialized microscopes.
Payments for indirect research costs are added on top of the base value of a grant, adjusted for certain ineligible expenses. Institutions that receive NIH grants have historically negotiated their reimbursement rates individually; UT Austin’s negotiated rate was 59% of the adjusted base grant amount.
But the NIH has now capped reimbursement for indirect costs at 15%, meaning UT will lose millions of dollars if the rule holds. An NIH database shows that UT Austin has hundreds of active NIH-funded projects.
The NIH has characterized the new rule as a prudent cost-saving measure.
“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,” the organization said in a memo.
The decision follows an unsuccessful attempt by the Trump administration to freeze funding for federal grants and loans, which caused confusion among researchers like Wallingford who work closely with the NIH.
A judge has already halted the new NIH guidance in 22 states in response to a lawsuit filed by those states’ attorneys general. Texas was not part of that lawsuit, so the new reimbursement rate is still in effect here, pending further legal action.
Daniel Jaffe, UT Austin's vice president of research, sent faculty an email Monday directing them to continue spending grants and making budget proposals as normal. The university pays facilities and administration expenses from its own accounts and seeks reimbursement from the NIH.
But Jaffe’s message did not contain answers about how the change might affect the university’s programming or budget.
“We are working to understand the impact of the new policy on the budget for research support operations,” Jaffe said in the email.
Wallingford said he isn’t optimistic that UT Austin could make up the lost funding.
“It's possible they can pass some of that expense on to students, which I don't think is fair, so I don't think they will. It's possible that philanthropy might step in and suddenly do it. But it's a massive hole,” he said.
Beyond the impact to Wallingford’s own lab, he is concerned that the change will wound scientific progress in the United States.
“I don't think there is another country that really has the science infrastructure that the United States has, and so much of that comes, at least on the biomedical side, from NIH funding,” he said. “It's the backbone of all of the American biotech industry."
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