A Year of Impact: Holding the Line on Cuts to F&A

By APLU President Waded Cruzado

A year ago this month, the National Institutes of Health (NIH) took action to cut the reimbursement of Facilities and Administrative (F&A) costs for grantees. APLU, the Association of American Universities (AAU), and the American Council on Education (ACE) quickly filed a lawsuit challenging the NIH action. APLU, AAU, and ACE ultimately filed lawsuits challenging similar actions at the National Science Foundation, U.S. Department of Energy, and U.S. Department of Defense.

F&A costs are inextricably tied to conducting lifesaving and pathbreaking research, and the cuts would have had a devastating impact on public and land-grant universities and the research they undertake on behalf of the American people.

A year after NIH action, we have thus far averted the most dire scenarios through legislative advocacy and action in the courts, while charting a path to address concerns of policymakers. Following agency actions to cut F&A reimbursements early last year, APLU and partner organizations led the formation of the Joint Associations Group to develop an alternative model for reimbursing F&A costs in a clear, efficient, and transparent manner with buy-in from the scientific community and policymakers. The JAG unveiled the alternative model in July.

At most major federal agencies with greatest significance to the APLU membership, cuts to F&A are presently blocked thanks to a combination of the APLU-AAU-ACE lawsuits and congressional action. The NSF and DOD policies are now permanently vacated. The NIH and DOE cases are in various stages in federal courts. You can read in detail about where the cases stand here.  

APLU, member institutions, and our JAG partners worked closely with appropriations leaders on Capitol Hill to advocate for policy provisions in the Fiscal Year 2026 spending measures that explicitly prevent agencies from using federal funds to modify current indirect cost rates, also known F&A costs. Lawmakers advanced blocking language to allow time to codify the alternative JAG model into law. APLU has a tracker compiling F&A language across all FY26 appropriations bills.

Although we have thus far avoided immediate cuts to F&A reimbursement rates, lawmakers have suggested reforms to the current system are needed. The indirect cost language in the FY 2026 bills is critical to staving off possible unilateral efforts to slash reimbursement rates at federal research agencies, including through uniform guidance that would cut rates across federal agencies. Yet this language only prevents cuts through the current federal fiscal year, which ends September 30.

With the FY 2027 appropriations season kicking off soon, APLU and our JAG partners are meeting with congressional champions about the best way forward in codifying the JAG-developed alternative model for reimbursing F&A costs. A significant amount of advocacy remains ahead of us to codify the JAG model into law given looming efforts to cut F&A costs in the new fiscal year starting October 1. If the past year has demonstrated anything for our community, it’s the extraordinary power of public and land-grant universities speaking with a unified voice to advance lifesaving and game-changing research and the transformative power of higher education for students and society.