When researchers at Penn State and other universities receive grants for their work, a certain amount goes to cover overhead — keeping the lights on and the labs running.
Those indirect costs vary. According to the National Institutes of Health, they average 27% to 28%, but can be 50%, 60% or higher. The Trump administration, though, wants to cap those costs at 15% for research getting NIH funding.
While a federal judge has temporarily stopped the Trump administration from enacting that policy, universities and faculty continue to monitor the situation. Under that policy, Penn State had been getting ready to pause applying for or accepting new NIH awards. Now, the university is moving ahead with seeking funding, as long as it does not include the 15% cap.
Dave Vanness, a professor of health policy and administration at Penn State, said he's concerned about what could happen in the long-run.
“I think universities already, many of them, spend more in resources doing research than they take in in compensation for them externally, and that part of the business of universities being a public good," he said.
If the policy is enacted, some institutions, he said, will likely have to rethink what they can accomplish and scale back. It could mean lost funding not just for faculty, but for administrative staff, research assistants and graduate students.
Then there's the potential impact on the research itself. In his field, that might be about the opioid crisis, quitting smoking or healthier eating.
“I worry that without that research, we are going to continue to see harms to our overall nation's health and well being, and we'll continue to spend more money treating illnesses that could be prevented. It just does not make sense to me that we would cut off the lifeblood of the research we need to start getting these things right.”
The developments come as Penn State has made becoming a leader in research a priority. The university broke its own records for research funding in 2023-24, with research expenditures totaled $1.34 billion, an 8% increase from the previous year. That includes a total of $838 million in federal funding, with $200 million from the Department of Health and Human Services, of which the NIH is a part.
According to the university, when applied to last year's research the new policy would have meant costs $35 million more than the allowable 15%.
"The loss of these funds will substantially reduce our ability to conduct groundbreaking research, particularly in the health sciences," said Senior Vice President for Research Andrew Read and Karen Kim, dean of the College of Medicine, in a message to the community.
They said that the Trump administration's proposed policy change "represents a significant shift in funding policy and would have substantial implications for our ability to support federally funded research."
"We also know that many in our research community may be thinking about the potential for other funding agencies to take similar actions."
