The Trump administration froze $1.5 billion in Nation Institute of Health funding grants on Jan. 27, stalling about 16,000 proposals.

On Feb. 7, the NIH proposed a policy to cap the indirect cost rate for new and existing scientific research grants at 15% to reduce government spending, compared to an average rate at 30% today. The indirect cost rate is the rate of reimbursement for research expenses such as personnel, maintenance, equipment and accounting.

The cut would not change the NIH’s overall funding budget, but it would redistribute the funds away from indirect costs, aligning with the Trumps administration’s broader federal funding cuts.

Kenneth Curr, Associate Professor of Biological Sciences at Cal State, East Bay, said funding for research is divided into two types: direct costs and indirect costs.

“Direct costs have everything to do with the actual science itself, buying the reagents, paying for the personnel, buying equipment that is needed for the experiments to be done,” Curr said. “Indirect costs are a substantial amount of the grant, and that has to do with paying the establishment itself. So if you’re doing some work at Berkeley, they’re giving you the lab space, they’re providing you the electricity. they’re providing you the water. They’re providing you the safety. They’re providing you the way of ordering and getting your products and all this stuff. That’s indirect costs.”

On Feb. 10, District Court Judge Angel Kelley temporarily blocked the NIH’s proposed policy until she makes a final ruling. NBC reports that of the $35 billion in NIH grants awarded in 2023, $9 billion was spent on indirect costs, which account for personnel, maintenance, equipment and accounting.

According to NPR, the funding freeze was partially lifted on Feb. 26 by the Trump administration, allowing grants to be reviewed again. 

According to the New York Times on March 5, Kelley ordered a preliminary injunction that prevents any changes from the NIH until the court can work through the case.

David Mayo, the Senior Director for Research Administration at the California Institute of Technology, said indirect costs are calculated using a government-approved rate applied to direct expenses such as salaries, supplies and equipment. However, Mayo said the blanket cap fails to account for varying research costs in different cities and states.

“When the government said in the memo, 15% flat, does it cost the same in research salaries at Stanford, Caltech or UCLA as it does at Kansas State?” Mayo said. “Salaries are going to be lower in lower-cost areas. That’s why indirect cost rates differ from universities, and the indirect cost calculation recognizes that things don’t cost the same everywhere.”

Curr said the NIH’s funding is vital for scientific research at universities. 

“NIH is important for state schools, but it’s incredibly important for schools like Berkeley, Stanford (and) UCSF who are pretty much 100% dependent on NIH funding,” Curr said. “There’s private funding that they can get. I you’re into drug development, you might be able to get some money from pharmaceuticals. However, that’s a conflict of interest, because the drug companies are paying you money to test their drugs. That’s why NIH is best, because it’s a non-biased association.”

Biology teacher Nicole Loomis said the policy for cutting indirect cost rates would significantly impact graduate and PhD students, who need research to obtain their degrees.

“Already, universities have said, ‘We’re not going to admit any PhD students until this is sorted out.’ So it’s going to trickle down, and it’s going to have huge impacts,” Loomis said.

The budget cuts will not only affect medical labs, but also many research institutions, particularly in funding payment for staff, supplies, equipment and lab maintenance. For example, according to NPR, Harvard’s NIH funding would drop from $135 million to $31 million under this new policy. 

Mayo also said the NIH’s proposal was unexpected. 

“On Feb. 7, after NIH closed, when they issued the memo to go into effect the next Monday,” Mayo said, “no warning, no opportunity to ask questions, so it was problematic. Universities were specifically targeted in the memo, not just NIH grants. It was reducing the amount it would reimburse universities.”

Chemistry teacher Aparna Sankararaman said the policy could also restrict freedom within research.

“When I was working in a research lab a long time ago, at that time where there was no threat to the budget. It was already pretty competitive to try to get funding,” Sankararaman said. “If the budget cuts pass for NIH, I think it’s going to get worse. Labs are going to have to cut back on a lot of ideas. Unrelated research often leads to big breakthroughs, and with budget cuts, that freedom to explore is going to get severely curtailed.”

To prepare for potential cuts, Curr said researchers may seek alternative funding or adjust the way they present grants.

“There’s going to be other solutions, but they’re also going to have to change the way that they look at their research,” Curr said. “They’re going to make sure that the project grants that they write up are going to try to be 100% fundable. Now it’s like, ‘We’re not going to put in anything in there that could be too experimental.’”

But Mayo said nothing has changed for research yet at some universities due to the temporary block.

“It’s not affecting anybody directly, but what some institutions did, especially if they were heavily NIH-funded, is that they put hiring freezes,” Mayo said. “They stopped hiring people because they didn’t know if they’d be able to pay them. So has it affected CalTech? No, and it hasn’t affected a lot of institutions, because the block went into place so quickly and for the institutions basically it’s business as usual until something changes.”

However, Mayo said if the policy is passed, funding issues may arise. 

“If we do have to deal with it, we’re going to have to figure out if we can literally afford to do business with NIH,” Mayo said. “So if we’re now submitting proposals to NIH where we’re not going to get reimbursed for the full cost of doing that project, why should we submit it at all, because if we don’t get reimbursed from NIH, there’s nowhere else to get the money unless we increase tuition, (which is) not a good option.”

Sankararaman said another worry is that a future with private funding could mean chasing profit over discovery.

“If you work for a private company, you have to follow that company’s vision, that company’s ideas and that company’s role for profit,” Sankararaman said. “You don’t get as much creativity as if you were in an academic institution. The diseases that are going to get looked at, mostly in the medical field, will be the trendy ones.”

And Curr said any cuts could exacerbate a bias towards medical research, neglecting other scientific fields.

“In the last 20 years, there’s been a new discipline called translational medicine, which goes directly from the lab into the clinic,” Curr said. “That’s probably where we’re headed now, and it’s going to be harder for people who are understanding basic science to get funded. Basic sciences are the understanding of how something happens or why something happens. And some people that are outside of science don’t see the need for it.”

Which could cause the US to fall behind in scientific innovation.

“The people that are making these decisions have to be aware that if you stop, if you slow down the progress of research … it’s all going to slow down,” Curr said. “But that doesn’t mean that other countries are going to slow down with it. China, Russia have very good science programs. All of them are still going to move ahead. What’s going to end up happening is the US will slowly fall behind.”

For Loomis these potential cuts reflect a broader distrust of the value of science in America.

“While skepticism is obviously warranted in science, they don’t necessarily all have the critical thinking skill development to really understand how science works or what they actually should be skeptical of, as opposed to what’s being amplified on the internet by people who really don’t know what they’re talking about,” Loomis said. “So I think it’s only going to increase the erosion of trust in science, which is very unfortunate, and it threatens our place in the world as a dominant producer of innovation in medicine.”