by: Kyndall Hanson, education reporter
On Feb. 7, the National Institute of Health (NIH) issued a policy outlining a standardized 15% cap on indirect costs incurred through research funded by grants, including maintenance, operational, and administrative expenses. While the NIH’s policy is questioned in federal courts, universities like Virginia Tech are left to weigh the potential impacts of reduced federal support on research initiatives.
Why it matters: The NIH is one of the first governmental agencies to outline research funding restrictions following the Trump administration’s now-rescinded memo outlining a federal funding freeze. According to a statement by Virginia Tech President Timothy Sands, the NIH’s decision to cut the reimbursements of indirect costs could have a $13 million impact on the university’s annual research budget and over $55 million if the policy was extended across all federal agencies.
- “Lives will be lost,” said Sands, describing the potential “debilitating effects” of funding cuts on biomedical research at the university, among other impacts across research disciplines.
- “Research is an integral part of who we are and what we do,” said Mark Owczarski, interim vice president of communications and marketing at Virginia Tech. “It’s going to take us time to figure this stuff out.”
The big picture: As an R1 university, Virginia Tech undergoes significant research activity. In 2024, Virginia Tech’s sponsored research expenditures were $453.4 million. According to Sands, over $308 million of these research expenditures were federally sponsored. As the university works to understand the mandates of federal agencies, the long-term impact on research is unclear, described Owczarski.
- According to Sands, of the over $308 million in federally sponsored research, $73 million was attributed to indirect cost reimbursements, or facilities and administrative research costs – with an additional $18 million in indirect expenses subsidized by alternative university funding sources.
- “It requires us to ask a lot of questions, do a lot of analysis, figure out what we are doing and [what] each of these executive orders really mean,” said Owczarski. “In the long term, there could be significant impacts, or there could be very little impacts – we don’t know.”
Zoom in: The Virginia Tech Office of Research and Innovation has established a ‘Federal Agency Update’ webpage to notify the university community of updates surrounding university compliance with executive orders and additional impacted federal guidelines.
- According to Owczarski, as of early February, Virginia Tech’s research is continuing.
- “We’re asking researchers to continue the good work they do,” said Owczarski. “Engage in their research, keep applying for grants – just keep doing what you’re doing, and we’ll figure out how we’re going to support that long-term.”
- While university research is largely supported by federal grants, additional funding opportunities are available to support to learning experiences at Virginia Tech. According to Julia Ward, assistant director for professional development and experiential programs at Virginia Tech, programs like Campus internEXP are supported by state grants and not affected by federal funding regulations.
What we’re watching: The long-term impacts of the NIH’s regulations on research and university funding are still in question as recent mandates are challenged in federal courts. The early days of the Trump administration have demonstrated a push for policy demonstrating government efficiency, meaning university funding may be a continued target for regulation.
- “It’s about how much research we can actually do,” described Owczarski discussing the potential loss in federal funding. “We’d have to make up the costs somehow, redirect things, but we don’t know what the outcome is going to be.”
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