The National Institute of Health (NIH) on Feb. 7 decreased the maximum indirect cost rate research institutions can charge the government to 15 percent. Indirect costs include utilities, facility, and personnel, and service contracts.
NIH predicts the change will save more than $4 billion a year.
In 2024, $9 billion of the $35 billion granted for research “was used for administrative overhead, what is known as ‘indirect costs,’” the agency said in a post on social media platform X on Friday.
“The average indirect cost rate reported by NIH has averaged between 27 percent and 28 percent over time. And many organizations are much higher—charging indirect rates of over 50 percent and in some cases over 60 percent,” the NIH said in its announcement….