Federal funding cap on colleges would cut at least $40M from research at UK
A directive from President Donald Trump to cap federal funding for health research at U.S. colleges would cut at least $40 million from the University of Kentucky, President Eli Capilouto said Monday.
The National Institutes of Health, a major source of funding for higher education medical research, announced Friday it was installing a cap on what’s known as “indirect funding.” Under the directive from the Trump administration, indirect funding — which covers the costs of building maintenance, utilities and support staff needed to conduct research at universities — would be capped at 15% of the grant.
Nationwide, the NIH said $9 billion of the $35 billion it awarded in grants last year — about 26% — were indirect funding.
UK received about $163 million from the NIH last year, according to university records, but it was not immediately clear how much is considered indirect funding. Capilouto said the rate of indirect funding is negotiated between institutions and the NIH, and it can range from 20% to 54%, depending on the research and grant. The university did not provide a total breakdown of that money, and such a breakdown is not included in the university budget.
“If this policy change is enacted, it will impact the way we do research at the University of Kentucky,” Capilouto said in a statement. “It will cost UK tens of millions of dollars annually and will hit our local and state economies. More important than any numbers, though, it will impact the work we do to advance the health of Kentucky in those areas most critical to our future — including cancer, heart disease, children’s health, Alzheimer’s and opioid use disorder.”
The funding cap is one of several initiatives aimed at slashing federal spending introduced by the Trump administration in recent weeks. An executive order issued in January ordered a pause in all federal grants and loans, which could also impact higher education and the amount universities receive from the federal government. That order was temporarily halted by a federal judge.
UK researchers and professors were left scrambling on Monday trying to determine what the new NIH funding cap meant for the state’s largest school. Some expressed concerns about what it meant for staffing at the university, while others worried about what it meant for continuing research.
“I think the breadth of the disaster is not really fully appreciated,” said Vincent Cassone, a professor in the biology department at the University of Kentucky.
In the announcement, NIH touted that the cap would save the federal government about $4 billion per year.
“This rate will allow grant recipients a reasonable and realistic recovery of indirect costs while helping NIH ensure that grant funds are, to the maximum extent possible, spent on furthering its mission,” the NIH policy said.
Top law enforcement officials from 22 states sued the NIH Monday to block the cap. Though Kentucky is not part of the lawsuit, the pause was extended nationwide. .
UK is the largest recipient of NIH funding in the state, followed by the University of Louisville, which received less than half of UK’s $163 million.
UK’s total budget is nearly $8.4 billion in fiscal year 2024, with more than $488 million in grants and contracts awarded to the university. More than half of that comes from various federal agencies.
Cassone said indirect costs go toward paying for clerical staff who help with grants, as well as paying for graduate and postdoctoral students who work in laboratories and research. Additionally, for those whose research involves animals, indirect funds pay for the care of animals.
With cuts to indirect costs, the university would either have to find ways to absorb those costs or make cuts to the things covered by indirect costs, Cassone predicted.
“I don’t think a lot of people really know what’s going to happen,” Cassone said.
Ann Morris is a professor whose research looks at finding ways to treat diseases involving the retina, and she uses zebra fish in her research. The grant she receives helps pay for her postdoctoral associate, students working in the lab, and a full-time technician who cares for the fish used in the research.
Morris said if the indirect funding cap goes through, she would likely have to employ fewer people in her lab, meaning “fewer hands and a smaller knowledge base to mentor and train graduate students.”
Trump previously issued an executive order to pause and investigate federal spending, including trillions of dollars in federal grants and loans. But that order was halted by a federal judge minutes before it was to go into effect.
Morris works with the National Eye Institute on her research, and she said that order has put funding for part of her research on hold.
“The indirect cost problem is a big existential threat to academic science and biomedical research, but it’s also part of a much bigger, full-frontal assault on biomedical research and science in the U.S., and I think it’s important to see it in the context of this bigger picture,” Morris said.
Editor’s note: This story has been updated to reflect that the pause on NIH cuts now applies to all U.S. states, not just the 22 that filed a lawsuit to stop the cuts.
This story was originally published February 11, 2025 at 8:40 AM.