'What a ripoff!': Trump sparks backlash after cutting billions in overhead costs from NIH research grants

The National Institutes of Health announced that it would be cutting $9 billion in overhead costs associated with federally funded research grants that go to various institutions.

When a grant is awarded, an additional percentage, on top of the allocated research funding, goes to the facility housing their work to cover these "indirect costs." According to the announcement, that percentage has historically been around 27 to 28% for each grant; however, the new directive is now imposing a 15% threshold, unless otherwise negotiated. 

"Most private foundations that fund research provide substantially lower indirect costs than the federal government, and universities readily accept grants from these foundations. For example, a recent study found that the most common rate of indirect rate reimbursement by foundations was 0%, meaning many foundations do not fund indirect costs whatsoever," NIH's announcement, released Friday evening, stated. "In addition, many of the nation’s largest funders of research—such as the Bill and Melinda Gates Foundation—have a maximum indirect rate of 15%. And in the case of the Gates Foundation, the maximum indirect costs rate is 10% for institutions of higher education."