Cal Poly researchers worry about losing funding in ‘devastating’ Trump administration cuts
The National Institute of Health announced new cuts to research grants last week that could be “devastating” for Cal Poly research funding, according to university experts.
The agency capped the indirect funds that institutions rely on for overhead costs at just 15%.
In response, California Attorney General Rob Bonta joined a coalition of 22 states in suing the Trump administration to stop the funding cuts on Monday.
A federal judge granted a temporary restraining order on the cuts later that afternoon, effectively blocking them from taking effect, but as seems to be the case with many of the Trump administration’s executive directives on federal funds, researchers fear the federal government might act faster than the courts can.
“If that indirect cost rate cut holds, it would be devastating for our Center for Health Research — and biomedical research across the nation,” Cal Poly professor and director of the university’s Center for Health Research Suzanne Phelan told The Tribune.
Phelan said about 90% of the research center’s funding comes from National Institute of Health grants. That currently adds up to $37.6 million in funds, $18.1 million — nearly half — of which covers the center’s indirect costs, she said.
Indirect research funds help pay for everything from researchers’ wages, pilot studies, facility upkeep and stipends for students. Phelan said the funds also help secure future grants.
“The presence of these things at an institution is evaluated as part of the review process — and any gaps reduces the likelihood of getting funding in the first place,” she said.
Without receiving indirect cost rates in full, the future of Cal Poly’s health research center could look grim.
“Unless money from other sources can support, we simply won’t be able to do our research,” Phelan said. “These operations supported by indirect costs are part-and-parcel to research.”
Since taking office, the Trump administration’s strategy has seemed to be to throw executive orders choking federal funds at the wall and see what sticks, sometimes blatantly disregarding court orders.
On the same day the judge blocked the cuts, another federal judge found the administration had violated a order blocking a sweeping federal funding freeze, NBC reported.
The inability of the courts to keep up with White House orders has cast doubt on whether federal agencies’ controversial budget cuts can be stopped before damage is done.
While the Cal Poly health research center hasn’t yet heard of any budget changes to its ongoing grants, Phelan remains skeptical.
“We’ll have to see how court cases go in California and elsewhere to protect indirect costs,” she said.
National Institute of Health announces cap on indirect research grant costs
Indirect research funds typically go toward administrative and operational overhead costs like paying employees, purchasing research equipment and even just keeping the lights in the labs on.
According to the National Institute of Health’s announcement, $9 billion of the $35 billion in research grants the agency distributed in 2023 went to covering these indirect costs.
Scientists aren’t paying these overhead costs themselves. Rather, when a lab receives an Institute grant, the umbrella institution or university that houses the grantee receives an additional percentage of the grant to cover those indirect costs, with the institution often fronting the bill and being paid back by the government after the fact.
“The NIH’s drastic reduction in reimbursement for previously agreed upon administrative costs will leave the CSU’s 23 universities with millions in unfunded expenses, jeopardizing critical research and support systems needed for program success,” said California State University spokesperson Jason Maymon in a news release. “This decision threatens not only groundbreaking research but also the future of student innovation and scientific progress.”
Usually, indirect cost rates are negotiated between the research institution and another cognizant federal agency on behalf of the Institute, but the health agency just limited all indirect costs rates to 15% maximum.
According to the memo, the average indirect cost rate for Institute grantees was between 27% and 28%, but could reach over 60% in some cases.
“Although cognizant that grant recipients, particularly ‘new or inexperienced organizations,’ use grant funds to cover indirect costs like overhead, NIH is obligated to carefully steward grant awards to ensure taxpayer dollars are used in ways that benefit the American people and improve their quality of life,” the Institute’s Office of Policy for Extramural Research Administration said in its announcement.
The Office of Policy for Extramural Research Administration did not immediately respond to The Tribune’s request for comment.
NIH-funded research is not the only research at risk
Institute-grant-funded labs are not the only ones that seem to be losing their federal grants.
Since taking office on Jan. 20, President Donald Trump has signed dozens of executive orders slashing funding toward things like diversity, equity and inclusion programs and climate goals left and right. In response, some federal agencies have paused research grants while awaiting approval of their compliance with the new administration’s goals.
What exactly this means for federally-funded research? No one knows yet.
The Tribune spoke to a Cal Poly research professor — who asked to remain anonymous to protect himself from potential retribution — who was awarded a grant from a different federal agency at the end of last year.
Several weeks after the inauguration, the granting agency abruptly canceled a meeting to refine the details of the project three hours prior with no justification and no follow-up, he said.
It has been multiple weeks since the meeting was canceled and the professor last heard from the agency.
“My assumption is that grant isn’t going to happen,” he said.
He had several other pending grants that he is no longer expecting to hear back on either, he said.
The professor echoed similar concerns as Phelan, but in his case, the entire grant will be lost, not just the indirect costs. The ramifications of this could be even worse, especially for students, he said.
“When faculty at Cal Poly apply for grants, very often those funds have earmarks to support students,” he said. “Ultimately, our students are the ones who are going to suffer.”
Meanwhile, the San Luis Obispo County Public Health Department does not receive research funding from the Institute, but does receive other federal funds, spokesperson Tara Kennon told The Tribune.
“As the federal funding situation continues to evolve, we are staying tuned in and awaiting additional information and guidance on how changes may affect our work locally,” she said. “Right now, our programs are continuing to serve the community as usual.”
