APLU-AAU-ACE Prevail in All Legal Cases Challenging Cuts to Facilities & Administration Reimbursements

By Waded Cruzado, APLU President

I am pleased to report that the deadline has passed for the administration to ask the U.S. Supreme Court to review a lower court ruling in a case brought by APLU and its partners blocking major cuts to reimbursement of Facilities and Administrative (F&A) costs on National Institutes of Health grants. This means favorable rulings stand in all four cases, bringing an end to the litigation brought by APLU, AAU, and ACE challenging unlawful cuts at NIH, the National Science Foundation, the Department of Energy, and the Department of Defense.

The cases marked the first time in APLU’s history that it has been a plaintiff in a case, let alone one brought against the federal government. Given how devastating the impacts of the proposed cuts to F&A reimbursements (also known as indirect costs) would have been for our member institutions and the national interest, APLU and our partner associations felt compelled to respond to unprecedented actions in an unprecedented manner. You can read a summary of the various cases here.

Our work is not yet finished. Although we have avoided immediate cuts to F&A reimbursement rates for now, lawmakers have suggested reforms to the current system are needed and the administration has again proposed a 15 percent F&A cap for NIH in its FY 2027 budget released last Friday. The indirect cost language included in Fiscal Year 2026 funding bills that APLU, our member institutions, and advocacy partners secured 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.

We must remain at the table to listen to policymakers on Capitol Hill and the Trump administration to hear concerns and discuss reform, not just defend the status quo. Following agency actions to cut F&A reimbursements early last year, APLU and partner organizations led the formation of the Joint Associations Group (JAG) 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 Financial Accountability in Research (FAIR) model in July.

While the Office of Management and Budget (OMB) has indicated they appreciate the efforts of the JAG, they have also signaled that they still plan to produce their own F&A reform proposal through changes to Uniform Guidance regulations. We still await any formal regulatory actions from OMB.

APLU and our JAG partners are actively meeting with congressional champions about strategies to codify the JAG-developed FAIR 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.

Thank you for your continued engagement with APLU. Together, we have and will continue to have a positive impact.