NIH funding cuts- Stanford to lose ~168 million/year. - Printable Version
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NIH funding cuts- Stanford to lose ~168 million/year. - dabigv13 - 02-08-2025
If this is too political, mods please close this, however I think it directly impacts Stanford and could have implications for Stanford athletics as well.
The Trump administration purports to change the way NIH research grants are funded, capping the "overhead rate" at 15%. This is additional grant money for facilities and administration. From what I can gather, this ranges significantly at different universities. From what I have read and heard from others, Harvard is 69%, UW 55%, Scripps Institute 58%. It appears Stanford is 54% (2025) but I could be mistaken.
From what I could quickly gather, in 2022, Stanford was awarded 651million in NIH grants. If that is inclusive of the indirect costs, that means Stanford would lose ~168 million annually, assuming my math is correct and no other NIH funding changes (which it certainly could).
I'm sure BC at least and likely others would have greater insight into this and I'd welcome their perspectives. Obviously that is a massive amount of money, dwarfing the upcoming 20 million in House payments for NIL, and also more than the AD budget of 145 million (2022). Clearly the science departments would be most directly affected, but I'd imagine the university would likely divert funds from elsewhere to cover a lot of that money.
From what I gather it seems these indirect cost rates have been set by Congress, so it would seem the administration unilaterally withholding this money is an illegal impoundment and schools should have a strong legal case. What that means going forward is unclear at this time.
https://stanforddaily.com/2023/02/26/stanford-labs-received-over-651m-in-nih-funding/
https://cfr.stanford.edu/faculty/applying-funding/indirect-costs
Mudhead - Mudhead - 02-08-2025
It is fair to say that the school and faculty probably have some fence mending to do with the new head of NIH as well.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - chrisk - 02-08-2025
(02-08-2025, 02:08 AM)dabigv13 Wrote: If this is too political, mods please close this, however I think it directly impacts Stanford and could have implications for Stanford athletics as well.
The Trump administration purports to change the way NIH research grants are funded, capping the "overhead rate" at 15%. This is additional grant money for facilities and administration. From what I can gather, this ranges significantly at different universities. From what I have read and heard from others, Harvard is 69%, UW 55%, Scripps Institute 58%. It appears Stanford is 54% (2025) but I could be mistaken.
From what I could quickly gather, in 2022, Stanford was awarded 651million in NIH grants. If that is inclusive of the indirect costs, that means Stanford would lose ~168 million annually, assuming my math is correct and no other NIH funding changes (which it certainly could).
I'm sure BC at least and likely others would have greater insight into this and I'd welcome their perspectives. Obviously that is a massive amount of money, dwarfing the upcoming 20 million in House payments for NIL, and also more than the AD budget of 145 million (2022). Clearly the science departments would be most directly affected, but I'd imagine the university would likely divert funds from elsewhere to cover a lot of that money.
From what I gather it seems these indirect cost rates have been set by Congress, so it would seem the administration unilaterally withholding this money is an illegal impoundment and schools should have a strong legal case. What that means going forward is unclear at this time.
https://stanforddaily.com/2023/02/26/stanford-labs-received-over-651m-in-nih-funding/
https://cfr.stanford.edu/faculty/applying-funding/indirect-costs
From the NIH database, the 2024 number comparable to the $651M in 2022 appears to be $613M.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - Goose - 02-08-2025
(02-08-2025, 02:08 AM)dabigv13 Wrote: From what I gather it seems these indirect cost rates have been set by Congress, so it would seem the administration unilaterally withholding this money is an illegal impoundment and schools should have a strong legal case. What that means going forward is unclear at this time.I believe the indirect cost rate LIMIT is set by Congress. The exact rates are negotiated/audited between the NIH and the University. That is one reason why overhead rates differ among Universities. I do think you have very good point about the administration unilaterally changing the negotiated overhead rates on existing grants. Independent of the Congress, that is a breach of a contractual obligation.
However, if the administration wants to set the overhead rate differently for any future grants, they can. Congress could then (in theory) pass resolutions condemning that action. If that doesn't work they could (in theory) take "stronger action". What will actually happen going forward is IMO pretty much unknown. I don't think an indirect cost limit of 15% will be viable if the goals of these research and training grants are to be met going forward.
However, consider the fact that in 1991 Stanford's overhead rate was over 70%. Also, in 1991 Stanford and the Navy got into a spat where Stanford ended up paying back 1.2 million (of over 800 million allegedly "improperly charged") to the government. https://en.wikibooks.org/wiki/Professionalism/Stanford_Research_Scandal. This was military research, which follows different rules than NIH funding. The takeaways from that process probably still apply. IMO the government needs to monitor its expenses without creating an excessive bureaucracy. Auditing every university every 5 minutes won't "solve the problem". Having competent oversight might, but fat chance of that.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - chrisk - 02-08-2025
(02-08-2025, 02:11 PM)Goose Wrote:(02-08-2025, 02:08 AM)dabigv13 Wrote: From what I gather it seems these indirect cost rates have been set by Congress, so it would seem the administration unilaterally withholding this money is an illegal impoundment and schools should have a strong legal case. What that means going forward is unclear at this time.I believe the indirect cost rate LIMIT is set by Congress. The exact rates are negotiated/audited between the NIH and the University. That is one reason why overhead rates differ among Universities. I do think you have very good point about the administration unilaterally changing the negotiated overhead rates on existing grants. Independent of the Congress, that is a breach of a contractual obligation.
However, if the administration wants to set the overhead rate differently for any future grants, they can. Congress could then (in theory) pass resolutions condemning that action. If that doesn't work they could (in theory) take "stronger action". What will actually happen going forward is IMO pretty much unknown. I don't think an indirect cost limit of 15% will be viable if the goals of these research and training grants are to be met going forward.
However, consider the fact that in 1991 Stanford's overhead rate was over 70%. Also, in 1991 Stanford and the Navy got into a spat where Stanford ended up paying back 1.2 million (of over 800 million allegedly "improperly charged") to the government. https://en.wikibooks.org/wiki/Professionalism/Stanford_Research_Scandal. This was military research, which follows different rules than NIH funding. The takeaways from that process probably still apply. IMO the government needs to monitor its expenses without creating an excessive bureaucracy. Auditing every university every 5 minutes won't "solve the problem". Having competent oversight might, but fat chance of that.
The policy goes into effect Monday so the universities will have to act quickly and forcefully to minimize the disruption to the flow of funding. Even if they get legal orders to stay implementation, who is willing to enforce them?
RE: NIH funding cuts- Stanford to lose ~168 million/year. - cardcrimson - 02-08-2025
After a very cursory look online, while 15% seems tight, 54% to 69% is ridiculous. Pretty clear how colleges are funding all their growth, Stanford's facilities are absolutely stunning, with all the granite and sandstone. . . .
RE: NIH funding cuts- Stanford to lose ~168 million/year. - martyup - 02-08-2025
The USA is $36.5 trillion in debt.
https://www.usdebtclock.org/
RE: NIH funding cuts- Stanford to lose ~168 million/year. - dabigv13 - 02-08-2025
I'm not sure much of the money is going into building construction, but I don't think most of it. I have a sister, aunt, and brother in law who all work in research labs with a large portion of their salaries coming from NIH grants, including indirect costs.
Professors, undergraduates, and graduate students are not the only personnel required to make research labs function. In the past, this sort of funding was seen as a good way of making sure the US was the premier country for biomedical research. I think it still is, but that can change. Perhaps some places like Stanford have means of covering for these funds, but the money will have to come from somewhere.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - chrisk - 02-08-2025
Combined with proposed taxes on endowments, the incentive will be to funnel more contributions directly to operating expenses rather than endowments.
Until budget adjustments can be made, more contributions will be required from the end.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - fullmetal - 02-08-2025
Donations that create endowments are somewhat funded by vanity. That's not to say that we couldn't make endowments-for-operating-funds a thing...but it's much harder to put a family name on a chunk of the operating budget.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - cardcrimson - 02-08-2025
(02-08-2025, 06:00 PM)dabigv13 Wrote: I'm not sure much of the money is going into building construction, but I don't think most of it. I have a sister, aunt, and brother in law who all work in research labs with a large portion of their salaries coming from NIH grants, including indirect costs.I would imagine that those putting in the hours don't count as overhead, they would be direct costs. It's the buildings (well depreciation), the management, etc that count as overhead. Shouldn't hurt those who are doing the research at all. I could be wrong, but that's how it's accounted for in the manufacturing world, and according to Google AI, in research companies, too.
Professors, undergraduates, and graduate students are not the only personnel required to make research labs function. In the past, this sort of funding was seen as a good way of making sure the US was the premier country for biomedical research. I think it still is, but that can change. Perhaps some places like Stanford have means of covering for these funds, but the money will have to come from somewhere.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - jacket3ree - 02-08-2025
(02-08-2025, 04:57 PM)cardcrimson Wrote: After a very cursory look online, while 15% seems tight, 54% to 69% is ridiculous. Pretty clear how colleges are funding all their growth, Stanford's facilities are absolutely stunning, with all the granite and sandstone. . . .
Clearly I don't understand federal science funding, because those overhead rates seem ridiculously low to me. At least compared to what I am used to in the private public works sector. Many contracts are cost plus fee, subject to FAR audited indirect cost recovery. We self-audit every year and obtain periodic audits from various agencies. We are in line with industry expectation and rent Class B space, although our SF office has marble galore.
I understand we don't operate in the same realm as universities and terms vary but our break even overhead (no profit sharing - discounting safe harbor for ease of calculation, no bonuses) breaks down as 43% fringe benefits (VSH, insurance, payroll tax), 34% overhead, and 35% general and administrative (rent and the cost of operating, which is primarily non-billable labor), for a total ICR of 112%. Then we are typically allowed to add a 10% fee (profit) for a labor multiplier of 2.33. Crazy lean and mean. I won't take that job.
Fortunately profit sharing and bonuses are allowed under FAR. Because we've had good years with profit and bonuses, this pushes us to 56% fringe and 102% G&A for a total ICR of 192% and with the 10% fee, our labor multiplier is 3.21 and no one bats an eyelash.
Like I said, I clearly don't understand how NIH and university funding works, but it seems to me the NIH is getting a deal. If NIH has private companies do the same work, does anyone know what the fee structure is for that?
RE: NIH funding cuts- Stanford to lose ~168 million/year. - Goose - 02-08-2025
(02-08-2025, 09:46 PM)cardcrimson Wrote: I would imagine that those putting in the hours don't count as overhead, they would be direct costs. It's the buildings (well depreciation), the management, etc that count as overhead. Shouldn't hurt those who are doing the research at all. I could be wrong, but that's how it's accounted for in the manufacturing world, and according to Google AI, in research companies, too.I can assure you that is NOT how it is done when dealing with the government. I have lots of direct experience with DoD and some spousal experience with NIH (and CIRM). Direct costs, overhead costs, and G&A costs are separate categories that have different accounting rules for government contracts. Your negotiated rates make a very big difference in what compensation you get. It is a game-theory operation. As the business mix varies, companies move things from direct to indirect and visa versa. Being a "low overhead" operation is stupid if you can negotiate a high one.
At Stanford I am pretty sure lots of research functions ("core services") are overhead, e.g. the technicians that run lots of the lab equipment do not charge direct, the glassware washers do not charge direct, etc. Simpler for everybody that way. The timecard accounting for making these services account for every 15 minutes of their time by exactly which (of the multitude) of NIH grants they are supporting at that moment would be a nightmare.
FWIW, CIRM has an overhead cap of 20%. They also allow a "facilities fee", which is classified as a direct cost(!). The government (even State government) makes its own accounting rules. This cost is calculated as a percentage of the direct grant value. Sure looks like overhead to me :-). Google "CIRM grant facilities fee". Google AI does a great job in this case. Note that the profit vs. non-profit status makes a very large difference in how the facilities fee is calculated. After that is done, I am guessing Stanford comes close to its NIH overhead :-).
RE: NIH funding cuts- Stanford to lose ~168 million/year. - Nan3cy - 02-09-2025
(02-08-2025, 02:11 PM)Goose Wrote:(02-08-2025, 02:08 AM)dabigv13 Wrote: From what I gather it seems these indirect cost rates have been set by Congress, so it would seem the administration unilaterally withholding this money is an illegal impoundment and schools should have a strong legal case. What that means going forward is unclear at this time.I believe the indirect cost rate LIMIT is set by Congress. The exact rates are negotiated/audited between the NIH and the University. That is one reason why overhead rates differ among Universities. I do think you have very good point about the administration unilaterally changing the negotiated overhead rates on existing grants. Independent of the Congress, that is a breach of a contractual obligation.
However, if the administration wants to set the overhead rate differently for any future grants, they can. Congress could then (in theory) pass resolutions condemning that action. If that doesn't work they could (in theory) take "stronger action". What will actually happen going forward is IMO pretty much unknown. I don't think an indirect cost limit of 15% will be viable if the goals of these research and training grants are to be met going forward.
However, consider the fact that in 1991 Stanford's overhead rate was over 70%. Also, in 1991 Stanford and the Navy got into a spat where Stanford ended up paying back 1.2 million (of over 800 million allegedly "improperly charged") to the government. https://en.wikibooks.org/wiki/Professionalism/Stanford_Research_Scandal. This was military research, which follows different rules than NIH funding. The takeaways from that process probably still apply. IMO the government needs to monitor its expenses without creating an excessive bureaucracy. Auditing every university every 5 minutes won't "solve the problem". Having competent oversight might, but fat chance of that.
The indirect cost controversy at Stanford went on from 1990 to 1994. The Defense Contract Audit Agency alleged that Stanford had overcharged the government by $240 during the 1980s. Most of the research related to those costs was not military, it was medical. When the initial assignments were made, DCAA audit or NIH audit, the mojority of Stanford’s research was not in the medical school, it was in engineering and the sciences, but that had changed by 1990. In theory, audit oversight should have been changed by then to NIH, but due to interagency competition, the change had not been made (and presumably still hasn’t since I retired in 2008). Up to that time, Stanford had definitely had one of the highest IDC rates. But not the highest — I think that honor belonged to the Harvard Medical School.
(02-08-2025, 02:11 PM)Goose Wrote:(02-08-2025, 02:08 AM)dabigv13 Wrote: From what I gather it seems these indirect cost rates have been set by Congress, so it would seem the administration unilaterally withholding this money is an illegal impoundment and schools should have a strong legal case. What that means going forward is unclear at this time.I believe the indirect cost rate LIMIT is set by Congress. The exact rates are negotiated/audited between the NIH and the University. That is one reason why overhead rates differ among Universities. I do think you have very good point about the administration unilaterally changing the negotiated overhead rates on existing grants. Independent of the Congress, that is a breach of a contractual obligation.
However, if the administration wants to set the overhead rate differently for any future grants, they can. Congress could then (in theory) pass resolutions condemning that action. If that doesn't work they could (in theory) take "stronger action". What will actually happen going forward is IMO pretty much unknown. I don't think an indirect cost limit of 15% will be viable if the goals of these research and training grants are to be met going forward.
However, consider the fact that in 1991 Stanford's overhead rate was over 70%. Also, in 1991 Stanford and the Navy got into a spat where Stanford ended up paying back 1.2 million (of over 800 million allegedly "improperly charged") to the government. https://en.wikibooks.org/wiki/Professionalism/Stanford_Research_Scandal. This was military research, which follows different rules than NIH funding. The takeaways from that process probably still apply. IMO the government needs to monitor its expenses without creating an excessive bureaucracy. Auditing every university every 5 minutes won't "solve the problem". Having competent oversight might, but fat chance of that.
The indirect cost controversy at Stanford went on from 1990 to 1994. The Defense Contract Audit Agency alleged that Stanford had overcharged the government by $240 during the 1980s. Most of the research related to those costs was not military, it was medical. When the initial assignments were made, DCAA audit or NIH audit, the mojority of Stanford’s research was not in the medical school, it was in engineering and the sciences, but that had changed by 1990. In theory, audit oversight should have been changed by then to NIH, but due to interagency competition, the change had not been made (and presumably still hasn’t since I retired in 2008). Up to that time, Stanford had definitely had one of the highest IDC rates. But not the highest — I think that honor belonged to the Harvard Medical School.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - BostonCard - 02-10-2025
A judge placed a preliminary injunction on the indirect cost cap (sorry, I think this is behind a paywall)
https://endpts.com/judge-halts-some-nih-cuts-after-22-states-sue/
There's a link to the order (pdf) in the article:
https://storage.courtlistener.com/recap/gov.uscourts.mad.280590/gov.uscourts.mad.280590.25.0.pdf
BC
RE: NIH funding cuts- Stanford to lose ~168 million/year. - chrisk - 02-10-2025
This is Stanford's update to the community on the NIH cuts (estimates effect at $160 million)
https://news.stanford.edu/stories/2025/02/update-on-nih-announcement
includes link to diagram of which expenses are classified as indirect
RE: NIH funding cuts- Stanford to lose ~168 million/year. - jacket3ree - 02-10-2025
Thanks for the link Chris. Yep, a different world of accounting that I'm used to, so I retract my comments.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - Goose - 02-10-2025
(02-10-2025, 07:27 PM)jacket3ree Wrote: Thanks for the link Chris. Yep, a different world of accounting that I'm used to, so I retract my comments.For the 7 years I worked for a local DoD firm the overhead rate hovered around 110% and our G&A rate was 43%. Of course, that was back in the 70s, but the era should, in theory not matter. With a 9% profit (nominal limit on CPFF at the time) that was a multiplier of 2.76. In that case we were dealing with labor and material, which made calculating the overhead rate a bit tricky. 2.76 worked very well under those circumstances. The company we started at that point had a lower overhead, at least when we started. Crept up though as the ratio of labor to material increased.
I heard that the Lockheed Palo Alto multiplier in 1975 was about 4. Based on what I saw at the time, I would believe it.
RE: NIH funding cuts- Stanford to lose ~168 million/year. - BostonCard - 02-12-2025
I haven't seen this anywhere else, so maybe take it with a grain of salt until confirmed, but based on the screenshot of the memo, it does like the NIH has reversed its position.
https://popular.info/p/breaking-nih-admits-funding-freeze
Quote:Now, staff is finally authorized to issue new and continuing grants under existing "funding policies." The grants will be issued "with “the previously approved negotiated indirect cost rates” and not the 15% indirect cost cap the Trump administration was seeking to impose.
BC
RE: NIH funding cuts- Stanford to lose ~168 million/year. - TrumpCard - 05-22-2025
Harvard's foreign student program apparently is being terminated. I assume others will follow. What avenues will Stanford's international students have to continue their education/career track if Stanford's international student program is terminated as I suspect it will be? I anticipate a lot of disruption to the lives of Stanford's international students, but are there ways to mitigate that disruption? For example, can students apply for one-off approval even if their school no longer has the authority to designate people for essentially automatic approval of a student visa? Thanks for any informed input.