BY SHANNON O. WELLS

A $1.2 trillion funding package President Donald Trump signed into law Feb. 3 ended a brief partial government shutdown and brought a collective sigh of relief from the academic research community and related agencies whose ongoing funding has hung in the balance for months. 

The agreement funds a majority of federal agencies through September — including the National Institutes of Health (NIH) and National Science Foundation (NSF) — but left the Department of Homeland Security funded only for two weeks, setting up a potentially high-stakes confrontation regarding Trump’s immigration enforcement agenda, Politico reported. 

The legislation also ends a yearlong effort from the Trump administration to cap reimbursements for indirect research costs at 15%. The average reimbursement rate for institutions is 27% to 28%, though some colleges have negotiated reimbursement rates greater than 50 percent, noted a report by Inside Higher Ed. Pitt’s negotiated rate, which was renewed last year, is 59%.

Based on the recently passed budget bills, NIH and other federal agencies cannot alter how universities are reimbursed for costs indirectly related to research until at least Sept. 30.

In addition, Congress rejected the steep funding cuts the Trump administration had sought on several parts of the government.

• NIH received a $412 million increase to $47.2 billion.

• NSF’s budget was cut by about 3% — much less than the 57% cut the administration requested.

• The Department of Education, which the administration has said it wants to close, saw a $217 million increase in its budget over FY2025.

With the funding uncertainty resolved, at least for now, Rob Rutenbar, Pitt’s senior vice chancellor for research, and Mike Holland, vice chancellor for science policy and research, said they are “grateful to the Pennsylvania delegation and the rest of Congress for their work to fund the federal research agencies at levels that help maintain the vitality of the American research enterprise. House and Senate appropriators listened to universities’ concerns about abrupt changes to decades-long practices for indirect cost reimbursement on research grants. 

“They have directed the administration to work with the research community on a new transparent and equitable model,” the statement from Rutenbar and Holland said. 

The NIH’s announcement in February 2025 that it would cap indirect reimbursement rates led colleges and universities to consider cutting costs or research operations to make up the difference. 

Lawsuits quickly led to court orders blocking NIH, and several other government agencies, from capping reimbursement rates. An approach that gained traction last year, the Financial Accountability in Research, or FAIR, model, was discussed by Rutenbar and Holland at the Jan. 21 Faculty Assembly meeting. 

Rutenbar described FAIR as “the national research community’s response to recent unilateral attempts to change the indirect rates to 15% from the middle of calendar year 2025,” he said.

Holland explained that the FAIR model would be a “replacement for the current system that’s in the uniform guidance” and designed for “full cost recovery.“

Should FAIR be adopted, however, “there is a huge amount of work to be done” that Holland said will take a transition time of “probably two-ish years.”

Both the universities and research agency sides “would have a lot of work to do, from moving from where we are now to where we would have to be to make this functional.”

Shannon Wells is a University Times reporter. Reach him at shannonw@pitt.edu.

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