From the Chronicle of Higher Education: A federal appeals court on Monday ruled that the National Institutes of Health cannot unilaterally cap the indirect-cost rate on its grants at 15 percent, continuing a freeze on the controversial policy change that would cost universities billions. The ruling is a victory for the prominent higher-ed associations who joined the attorneys general of 22 states in suing over the move last year, claiming that it violates the Administrative Procedure Act and the explicit language of congressional appropriations.
The NIH’s February 7 announcement sent shockwaves through higher education. Research universities routinely negotiate with the federal government for indirect-cost reimbursement rates far above 15 percent; a sudden cap amounted to a multibillion-dollar hit to the sector. The Trump administration argued that a cap on overhead would better support science and be a more efficient use of public funds. Colleges countered that an arbitrary cap would fail to support the significant overhead — in the form of buildings and administrative staff, among other resources — not tied to a specific project but required to conduct advanced science.
The proposed policy was put on hold amid the attorneys’ general legal challenge. A federal judge ruled in their favor and issued a permanent injunction in April, finding that the measure was “arbitrary and capricious” and violated the law. A three-judge panel of the First Circuit Court of Appeals in Boston on Monday agreed, writing that the change “is unlawful because it violates a statute and regulations.” ...
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