Cornell, along with 11 other universities, filed a lawsuit against the National Institutes of Health on Monday challenging the recent cuts to funding related to “indirect costs” — which cover the expenses of research infrastructure — associated with NIH grants towards medical research.
This suit, filed by the Association of American Universities, the Association of Public and Land-Grant Universities and the American Council on Education, pushes back against recent action by the NIH to cap indirect funds for higher education research infrastructure to 15 percent of total grant dollars distributed. The lawsuit alleges that the proposed cuts violate federal grant regulations and administrative law and would harm medical research, the training of future scientists and the U.S.’s leadership in biomedical innovation.
Cornell and other leading research institutions could face annual losses exceeding $80 million each if a new policy from the NIH on research reimbursements takes effect.
What Are Indirect Costs?
The NIH — the largest source of funding for medical research in the U.S. — announced on Friday that it will significantly limit payments for indirect costs in grants as part of a broader push by the Trump administration to cut government spending.
When a grant is awarded, an additional percentage is added to cover "indirect costs" for the facilities housing the research. For NIH grants, this percentage has historically been around 27-28 percent, but the new directive sets a 15 percent cap unless a different rate is negotiated. For Cornell, indirect cost funding supports items including administrative salaries, office supplies, general-purpose equipment maintenance and utilities.
Cornell’s current indirect cost rate for endowed on-campus research is 64 percent, according to the University's Division of Financial Services. In the 2022 fiscal year, Weill Cornell Medicine received $107 million from indirect cost reimbursements. If the rate was set at 15 percent, Weill Cornell would have received only about $25.1 million.
Outcry to Cuts
David K. Skorton, a former president of Cornell and the current president and CEO of the Association of American Medical Colleges, condemned the NIH policy in a statement from AAMC.
“The [Trump] administration’s decision to drastically reduce federal support for biomedical research by cutting reimbursement for peer-reviewed NIH grants will diminish the nation’s research capacity, slowing scientific progress and depriving patients, families, and communities of new treatments, diagnostics, and preventive interventions,” Skorton wrote.
In a Monday statement, the NIH justified the cuts by comparing them to rates used by other nonprofit foundations that fund medical research, explaining that the move would ensure that more funds go toward direct scientific research costs rather than administrative overhead.
"The United States should have the best medical research in the world," the NIH statement reads. "It is vital to ensure that as many funds as possible go toward direct research costs."
A federal judge has temporarily blocked the Trump administration’s planned reductions in medical research funding after 22 states filed a lawsuit seeking to halt the changes. As such, research at universities like Cornell will not be immediately impacted. A court hearing is scheduled for Feb. 21.
The University Responds
On Saturday, the Cornell administration criticized the NIH's announcement of significant reductions in indirect costs for research funding in a University statement, and on Monday, a statement was sent to students and faculty explaining the joint lawsuit. Both statements were written by Interim President Michael Kotlikoff, Provost Kavita Bala and Provost for Medical Affairs Dr. Robert Harrington.
"Indirect costs are an essential component of the decades-long partnership between the federal government and universities to conduct research that saves and improves lives," the Saturday statement reads.
As the University proceeds with filing the joint lawsuit, the Monday statement expressed that Cornell “remain[s] deeply committed to research” that “enhances” the lives of people around the world.
“We look forward to partnering with the NIH to ensure that we fulfill that mission together,” the administrators wrote.
Individuals with questions about existing grants or in-flight proposals are advised to email researchimpact@cornell.edu or WCMResearch@med.cornell.edu.
Emma Galgano '27 is a Sun Contributor and can be reached at ejg243@cornell.edu.
