Note: This post was updated with new information on
February 13, 2025.
On February 7, the National Institutes of Health (NIH) issued Supplemental Guidance to its 2024 NIH Grants
Policy Statement, Indirect Cost Rates, purporting to cap indirect
cost (also called facilities and administration, F&A) rates at
15% for all new grants issued as well as for go forward expenses
for existing grants for educational purposes. The purported basis
for the cap, which is a quarter or less of the indirect rate
charged by many universities, hospitals, and other research
institutions, is that 15% is in line with the rate permitted by a
number of foundations.
Even though a temporary restraining order has already been
issued to prevent enforcement of the Supplemental Guidance pending
hearings in two lawsuits challenging the cap, we recommend that
recipients of NIH and other federal grants carefully evaluate the
terms and conditions of their government grants, contracts,
