February 8, 2025
Dear Faculty, Staff and Students,
Late Friday, the Office of the Director of the National Institutes of Health announced it would impose a standard indirect cost rate of 15% on all NIH grants. Functionally, this caps grant-funded facilities and administrative (F&A) rates at 15% of the total of each award. According to the guidance, this 15% rate would replace any individually negotiated rates for an institution. The guidance states that this policy “shall be applied to all current grants for go forward expenses from February 10, 2025 forward as well as for all new grants issued.”
This announcement comes on the heels of dozens of executive orders and other federal directives, some of which may also have an impact on the University of Nebraska. Some of these directives have already taken effect, and others will remain in flux for 60-90 days or longer as federal agencies look into their processes and make recommendations to the new administration on how to best fulfill each directive.
We are closely monitoring all federal actions that could affect the University of Nebraska, including the new announcement from the NIH. Despite the new ceiling for F&A funding, we still need to maintain our facilities, pay our utilities and take care of the day-to-day operations that keep our labs and other research facilities running. In fiscal year 2024, the total F&A costs at UNL, UNMC, and UNO amounted to $89.3 million, with $40.3 million attributed to NIH-funded projects. The university's average F&A rate is approximately 50%, though the rate varies from project to project. A reduction in the F&A rate to 15% would require the university to absorb more than $27 million to sustain its current research and facilities.
This change isn’t a cost savings; it’s a cost transfer that either intentionally reduces the scale and scope of our research programs and/or shifts responsibility for F&A from NIH to Nebraska taxpayers.
So far, only NIH grants are impacted by the 15% F&A ceiling. As with many of the orders that have come down thus far, this directive could change. We have been in close contact with our Big 10 peers, the Association of Public and Land Grant Universities, the Association of American Medical Colleges, and other organizations as we work to navigate this news together and advocate for our researchers. We have also been in close contact with our congressional delegation, and members of our NU Federal Relations Council will meet with the offices of each of our senators and representatives later this week.
We have received many questions from faculty wondering whether their federally funded research has been impacted by any of the directives thus far. If you have questions, please reach out to your program director or your campus’s office of sponsored programs. If you receive notice that your work is affected, please immediately contact your office of sponsored programs.
As we work through this time of change, please continue to do what you do so well: conducting world-class research, teaching our next generation of leaders, engaging with Nebraskans, working behind the scenes to make everything that happens across our university possible, and learning everything you can during the course of your college education. We appreciate each of you, and we are advocating for you, for our university, and for our future. I can’t thank you enough for being part of the University of Nebraska. We will continue to provide updates at frequent intervals as this rapidly evolving situation continues to change.
