APLU joined with the Association of American Universities (AAU) and the American Council on Education (ACE) as plaintiffs in lawsuits challenging several federal agencies limiting Facilities and Administrative (F&A) reimbursements (indirect cost rate) to a 15% rate for research grants.
F&A costs – also referred to as “indirect costs” – are essential costs of conducting research. When the federal government awards a grant to a university to undertake cutting-edge research, a portion of the funding supports the required research infrastructure that has made the American research enterprise the best in the world. The vast majority of a grant budget (typically 67-75 percent) directly supports researcher salaries, graduate students, equipment, and supplies. Another portion of the grant (typically 25-33 percent) covers necessary research infrastructure and operating expenses that the university provides to support the pathbreaking research. Learn more about the importance of F&A rates.
Click on the sliders below to read the latest updates on these lawsuits.
February 2, 2026
On February 2, the U.S. Department of Energy (DOE) filed a reply brief to the U.S. Court of Appeals for the First Circuit in the case brought by APLU, AAU and ACE challenging the 15 percent cap on facilities administrative costs imposed by DOE through a “ Policy Flash” in April 2025.
The brief acknowledges that the Policy Flash is no longer in effect because it has been superseded by a policy provision in the FY26 Energy-Water Appropriations bill, which was enacted as part of a minibus on January 23, 2026. Despite this, DOE is continuing its appeal, raising new arguments.
June 30, 2025
On June 30, 2025, Judge Allison D. Burroughs of the United States District Court for the District of Massachusetts granted a motion submitted by the government to convert the nationwide preliminary injunction issued on May 15, 2025 into a final judgment vacating the DOE Rate Cap Policy and its applicability to institutions of higher education nationwide. The government will have 60 days to appeal the decision and is expected to do so.
May 16, 2025
On May 15, 2025, U.S. District Judge Allison D. Burroughs issued a nationwide preliminary injunction halting the Department of Energy from “implementing, instituting, maintaining, or giving effect to the Rate Cap Policy in any form with respect to the IHEs [institutions of higher education] nationwide until a further order is issued by this Court”. In issuing the injunction, Judge Burroughs considered the merits of the claims made in the lawsuit and the irreparable harm that would result without an injunction. This nationwide injunction replaces the temporary restraining order in place since April 16, 2025.
April 16, 2025
U.S. District Judge Allison Burroughs issued a temporary restraining order (TRO) that covers all institutions in all states nationwide in the case filed by APLU, AAU, and ACE, and nine impacted higher education institutions against the U.S. Department of Energy. The judge’s order prevents the administration “from implementing, instituting, maintaining, or giving effect to the DOE Policy Flash: Adjusting Department of Energy Grant Policy for Institutions of Higher Education (IHE) (the ‘Rate Cap Policy’) in any form; from otherwise modifying negotiated indirect cost rates except as permitted by statute and by the regulations of the Office of Management and Budget; and from terminating any grants pursuant to the Rate Cap Policy or based on a grantee’s refusal to accept an indirect cost rate less than their negotiated rate.”
April 14, 2025
APLU joined with the Association of American Universities (AAU) and the American Council on Education (ACE) as plaintiffs in a lawsuit challenging the Department of Energy’s action limiting Facilities and Administrative (F&A) reimbursements (indirect cost rate) to 15% for research grants to colleges and universities.
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Read the full statement
January 5, 2026
The First Circuit Court of Appeals issued a decision affirming the District Court for Massachusetts in the lawsuit challenging NIH’s actions to cap F&A. Per the First Circuit decision, “In sum, we conclude that the district court properly exercised subject-matter jurisdiction over the plaintiffs’ claims. We also hold that NIH’s attempt, through its Supplemental Guidance, to impose a 15% indirect cost reimbursement rate violates the congressionally enacted appropriations rider and HHS’s duly adopted regulations. The district court’s decision is therefore affirmed.”
April 5, 2025
“We are grateful for the federal district court’s permanent injunction and judgment halting the implementation, application, or enforcement of the National Institutes of Health’s February 7 supplemental guidance imposing a cap of 15% on facilities and administration (F&A) costs reimbursement to universities who receive NIH research grants. The judgment entered yesterday was the product of a joint motion from the plaintiffs, including the Association of American Universities, the American Council on Education, the Association of Public and Land-grant Universities, twelve higher education institutions, the Association of American Medical Colleges, and 22 states’ attorneys general. The court’s injunction, previously temporary, will continue to apply to all institutions nationwide.”
March 5, 2025
Judge Angel Kelley of the United States District Court for the District of Massachusetts today issued a preliminary injunction halting the implementation, application, or enforcement of the National Institutes of Health’s February 7 supplemental guidance imposing a cap of 15% on facilities and administration (F&A) costs reimbursement to universities who receive NIH research grants. The injunction applies to all institutions nationwide. This preliminary injunction replaces the temporary restraining order that had been in place since February 11, which also halted the implementation of the supplemental guidance.
While a temporary restraining order is put in place when a court determines that plaintiffs have provided enough evidence to show that irreparable harm is likely to result if an action is not halted temporarily, a preliminary injunction requires a higher standard of review. The ruling means that the judge has considered not only the harms that the enjoined action is likely to cause, but also the potential merits of the underlying case.
The injunction follows a hearing held on February 21, 2025, during which both the representatives from separate lawsuits as well as the government presented arguments concerning the motion for preliminary injunction. The three lawsuits were filed by APLU, AAU, ACE, 12 universities, and one university system; the Association of American Medical Colleges; and 22 state attorneys general. The government is expected to appeal the decision.
February 21, 2025
Judge Angel Kelly of the U.S. District Court for the District of Massachusetts extended the court’s temporary restraining order (TRO) as it considers the plaintiffs’ request for a preliminary injunction. The TRO, which was previously set to expire today, blocks NIH’s implementation of cuts to the F&A rate.
February 12, 2025
On Tuesday, February 11, Judge Angel Kelley confirmed that the motion by APLU-AAU-ACE for a temporary restraining order (TRO) need not be granted because her TRO granted earlier in the day in a similar Association of American Medical Colleges (AAMC) lawsuit covers all institutions in all states nationwide. The three associations are heartened that the NIH research F&A cut is fully blocked from implementation under that order. A hearing in the APLU-AAU-ACE case, the AAMC case, and the Attorneys’ General suit has been set for next Friday, February 21 regarding an extension of the emergency TRO and next steps for progressing to the injunction phase of litigation. The APLU-AAU-ACE case will be represented by lead counsel Paul Clement from Clement & Murphy, along with Jenner & Block.
February 10, 2025
APLU today joined with the Association of American Universities (AAU) and the American Council on Education (ACE) as plaintiffs in a lawsuit challenging the NIH’s action limiting Facilities and Administrative (F&A) reimbursements (indirect cost rate) to a 15% rate for the agency’s research grants.
Read the full complaint
Read the full statement
September 30
On September 30, the U.S. Court of Appeals for the First Circuit effectively permanently vacated the National Science Foundation policy by approving the administration’s motion to dismiss its appeal.
June 20, 2025
On June 20, 2025, Judge Indira Talwani of the United States District Court for the District of Massachusetts granted summary judgment in favor of APLU, AAU, ACE and 13 research universities. Judge Talwani “vacated and declared invalid, arbitrary and capricious, and contrary to law” the NSF’s 15% indirect cost rate and the agency’s policy notice implementing it. The court ordered that the NSF provide notice of the decision to all grant recipients within 72 hours.
May 16, 2025
On May 16, 2025 in order to avoid the need for a hearing on a motion for preliminary injunction and in conjunction with an agreement made between the parties, the NSF agreed to pause until June 13, 2025 the implementation of the its policy cutting of F&A reimbursement rates for NSF grants and cooperative agreements. The NSF has made further information about this decision and its impact on current priorities available here under the “Indirect cost rate policy “ section.
May 5, 2025
Today, APLU, the Association of American Universities, and the American Council on Education filed a joint lawsuit in the United States District Court for the District of Massachusetts along with 13 research universities that are negatively affected by the latest effort from the administration to slash funding for crucial research that helps build a stronger America. The suit seeks to halt an attempt by the National Science Foundation (NSF), announced on Friday, May 2, to cut the rate at which it reimburses institutions of higher education for what are known as Facilities and Administrative (F&A) costs, also known as indirect costs. These reimbursements help cover the real and necessary costs associated with performing groundbreaking research on behalf of the American people.
February 18, 2026
The First Circuit Court of Appeals granted the U.S. government’s motion to drop its appeal vacating the policy, permanently vacating the DOD policy capping indirect costs at 15%
February 10, 2026
The U.S. government moved to drop its appeal of the U.S. District Court for the District of Massachusetts’ decision vacating the Department of Defense policy capping indirect costs at 15%.
December 9, 2025
The U.S. government government filed an appeal of the U.S. District Court for the District of Massachusetts’ decision vacating the Department of Defense policy capping indirect costs at 15%. The government’s appeal brief will likely be filed within 40 days.
October 10 Update: U.S. Judge Brian E. Murphy of the District Court for Massachusetts granted summary judgment to plaintiffs vacating the Department of Defense’s policy capping F&A rates on research grants.
July 18 Update: U.S. Judge Brian E. Murphy of the District Court for Massachusetts granted a preliminary injunction in the lawsuit challenging DOD’s F&A policy. The injunctive relief is granted to all plaintiffs and their members.
His order reads:
The Court, therefore, pursuant to Rule 65(a) of the Federal Rules of Civil Procedure, PRELIMINARILY ENJOINS Defendants, their agents, and anyone acting in concert or participation with Defendants from implementing, instituting, maintaining, or giving effect to the immediately effective portions of the Rate Cap Policy, i.e., those portions implementing a 15% cap for all awards issued on or after June 12, 2025, including but not limited to rejecting or treating adversely proposals for DOD funding submitted at universities’ negotiated rates rather than the 15% rate, in any form with respect to University Plaintiffs and Organizational Plaintiffs’ member universities until further order issued by this Court. This includes where a University Plaintiff or Organizational Plaintiffs’ member university is a sub-grantee or collaborator.
June 17 Update: U.S. Judge Brian E. Murphy issued a temporary restraining order (TRO) that covers all institutions in all states nationwide in the case filed by APLU, ACE, AAU and 12 impacted higher education institutions against the U.S. Department of Defense. The judge’s order prevents the administration “….implementing, instituting, maintaining, or giving effect to the immediately effective portions of the Rate Cap Policy, i.e., those portions implementing a 15% cap for all awards issued on or after June 12, 2025, including but not limited to rejecting or treating adversely proposals for DOD funding submitted at universities’ negotiated rates rather than the 15% rate.”
June 16, 2025
Today, APLU, the Association of American Universities, the American Council on Education, and 12 higher education institutions filed a joint lawsuit in the United States District Court for the District of Massachusetts. The suit seeks to halt the U.S. Department of Defense’s effort to cut facilities and administrative (F&A) reimbursements to 15% for all research grants to institutions of higher education that support breakthrough research designed to help protect our military service members and strengthen our national defense.
Read the full complaint
Read the full statement
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