When a laboratory at the University of California, Berkeley wins a grant from the National Institutes of Health, there is a research budget that goes to the principal scientist to cover the direct costs of the study. Then there is an additional percentage that goes to UC Berkeley to pay for indirect costs like the lab, microscopes, graduate assistants and even light bulbs.
The money that goes to the university to cover indirect costs is now the target of cuts from the Trump Administration.
On Feb. 7, the National Institutes of Health, which operates under the U.S. Department of Health and Human Services, announced that all new and existing awards would have to cap their indirect costs rate at 15%. After a legal challenge by 22 state attorneys general, including California’s, a federal judge issued a temporary order blocking the cut within those states. A hearing has been set for Friday in federal court in Massachusetts.
The NIH is the world’s largest public supporter of biomedical and behavioral science, with a research budget of nearly $48 billion.
According to California Attorney General Rob Bonta’s office, federal funds are the single most important source of support for its research in the University of California system, accounting for more than half of UC’s total research awards. In fiscal year 2023, UC received a total of over $2 billion in NIH contract and grant funding. UC Berkeley is part of the University of California system.
UC officials estimate the overall impact of the proposed cut to the university system to be more than $600 million.
On Wednesday, over a hundred graduate student researchers gathered on UC Berkeley’s campus under the banner of United Auto Workers 4811, their union, to brace for looming NIH funding cuts and to organize a collective response.
According to a Feb. 12 letter to the NIH from U.S. Sen. Elizabeth Warren, D-Massachusetts, whose state has the highest number of doctorate degrees per capita, the average indirect costs added to agency grants is around 27% to 28%.
At the Wednesday rally, Tanzil Chowdhury, a graduate student researcher in the Materials Science and Engineering Department at UC Berkeley, said that most of the grants the university has with federal agencies also give an additional amount of somewhere around 50% to 60% for indirect costs.
Chowdhury, who also serves on the executive board of UAW 4811, said the union found those overhead rates when they did an analysis of the grants that the university receives from federal agencies.
“Let’s say you get a grant of $100,000,” he said. “When that money actually gets disbursed to the university, they receive $100,000 for direct research costs. Then the funding agency adds another $60,000 on top of that, which goes toward indirect costs.”
Chowdhury also participates in research at the Lawrence Berkeley National Laboratory, where he is working to develop semiconductive materials that can be used for solar cells and longer-lasting batteries. He said the indirect cost budget is used to buy microscopes and spectrometers, and pay for staff that can design, build and operate specially tailored equipment.
Although a lot of the funding at Lawrence Berkeley Lab comes from the U.S. Department of Energy and the National Science Foundation, Chowdhury said the NIH could be a bellwether for all other agencies to follow suit.
Abrupt changes to this funding will leave gaping holes in the budgets that support the facilities and staff where our research occurs.
Katherine Newman, UC provost and executive vice president for academic affairs
In a Feb. 10 statement, UC provost and executive vice president for academic affairs Katherine Newman announced that UC had joined with the California attorney general’s office in the request for a temporary restraining order. She said indirect costs, also called facilities and administration expenses, are a foundational element of funded research.
“It covers the cost of personnel who assure the safety of adults and children enrolling in clinical trials for cancer and chronic disease, the ethics teams that assure those trials are done safely, the data and privacy teams that protect our personal data, and the equipment that fuels the labs where discovery is occurring,” Newman said.
She said the facilities and administration rate is negotiated with the NIH by each campus every three to four years.
“These costs are carefully developed with both NIH and congressional oversight,” she said. “Abrupt changes to this funding will leave gaping holes in the budgets that support the facilities and staff where our research occurs.”
The proposed cuts were preceded by a memo on Jan. 27 from the White House Office of Management and Budget requiring federal agencies to temporarily pause disbursement of funds. The pause was blocked by a federal judge in Massachusetts. OMB later rescinded its memo but signaled that they would continue to pursue the cuts, leaving scientists in a state of limbo and confusion about whether their grants would be renewed or honored.
Meanwhile, the graduate researchers at UC Berkeley are organizing a grassroots response. The Wednesday gathering led to a letter-writing and phone campaign to legislators for support. There was lots of talk about the “chilling effect” of Trump’s flurry of messages targeting institutions of higher education and research.
“There was a number of DEI programs and activities that the folks at the National Lab were able to go to,” said Chowdhury. “Those were shut down on day one of the Trump administration. There was an executive order letting all the federal agencies know that they had to end those programs, and the lab director sent an email out to everyone saying that they were immediately shut.”
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