North Carolina's top research universities could lose millions of dollars in support if a Trump administration revision to funding from the National Institutes of Health holds up.
Late Friday, President Donald Trump ordered a 15% cap on portions of NIH grants that cover "indirect facilities and administration" costs. Unlike direct research expenses that can be attributed to a specific study, universities use indirect F&A funds to – like research buildings, equipment, and staff.
The order was supposed to go into effect Monday, but several states – including North Carolina – have to stop it. Late Monday evening, a federal judge in Massachusetts issued a to halt the cuts until Feb. 21.
Historically, the NIH's rate caps for F&A funds have . Top research universities receive even higher rates, like Duke University and UNC-Chapel Hill, which have a 61.5% and 55% rate, respectively.
The two universities are also among the NIH's 15 highest grant earners, with and in federal NIH funding last year.
But now, they are set to be some of the NIH's .
There are more than 2,600 active grants at universities in the Triangle. Those universities are expected to receive more than $430 million in overhead payments and would stand to lose hundreds of millions of dollars under Trump's change. The projects include research on HIV, heart and lung disease in rural areas, and the prevention of future pandemics.
The policy applies to both current and future NIH grants. Penny Gordon-Larsen, UNC-Chapel Hill's Vice Chancellor for Research, said this could have a significant negative impact on the university.
"It's our economic engine for the state," Gordon-Larsen said in a Monday UNC Faculty Executive Committee (FEC) meeting. "We have huge numbers of workforce that are employed in research-related activities. We've got over 14,000 North Carolina employees engaged in research. We've got over 310 businesses we've spun out; $2 billion in North Carolina salaries."
At the FEC meeting, Gordon-Larsen compared university research grants to a car. Where direct costs may be filling up the tank or patching a flat tire. Indirect costs include insurance, taxes, and maintenance. "You can't drive the car without all those indirect (costs)," Gordon-Larsen said.
The same, Gordon-Larsen says, goes for research.
"It's helped us to come up with strategies and discoveries that protect our national security and enhance our global competitiveness," Gordon-Larsen said. "Our work has led to life-saving technologies, products, cures – all kinds of impact."
Gordon-Larsen said some of the specific expenses UNC-Chapel Hill uses F&A funds for include salaries for staff, hazardous waste disposal, and lab supplies.
The university also uses F&A funds to finance bond debts for its buildings. According to a 2024 from the UNC Board of Governors, UNC-Chapel Hill has more than $1.2 billion in outstanding bond debt.
UNC-Chapel Hill has earmarked several million dollars of F&A funds to repay its building bond debt. The university won't fully pay off some of these projects until at least 2041.
"(F&A funds) are not a revenue source for the university," Gordon-Larsen said. "They are cost recovery for the work that's been performed and they are not charged until those direct research expenditures occur."
After the judge's temporary restraining order, UNC System President Peter Hans released a statement.
"Federal investments in university biomedical research contribute mightily to North Carolina's economy and quality of life, funding life-saving discoveries and supporting thousands of jobs," Hans said. "I urge patience while the issue is addressed, and I’m hopeful this will ultimately produce a healthy conversation about the benefits of university research to America's competitiveness while ensuring accountability to the taxpayers."
The F&A cap could also have negative ramifications for several other universities in North Carolina. Many public and private institutions have an above average rate, including NC State (52%), Wake Forest (45.5%), and NC A&T State University (45%). The universities received more than $48 million, $140 million, and $5 million respectively from NIH last year.
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