By Dietrich Knauth
NEW YORK (Reuters) – A group of U.S. universities sued the Department of Energy in Massachusetts federal court on Monday over steep cuts to federal research funding in areas like advanced nuclear technology, cybersecurity, novel radioactive drugs, and upgrades to rural electrical grids.
The universities – which include Massachusetts Institute of Technology, Princeton University, California Institute of Technology, and the University of Illinois – asked a federal judge in Boston to immediately block Republican President Donald Trump’s administration from moving forward with a policy change meant to reduce government spending in support of “indirect” research costs, which are not readily attributable to specific projects.
Indirect costs are often used to fund facilities, equipment and research staff that provide value across multiple research projects, rather than being tied to a single project, according to the lawsuit. Arbitrary cuts to indirect research costs will force universities to lay off staff, shutter expensive facilities, and devastate the careers of young scientists, the universities alleged.
“If DOE’s policy is allowed to stand, it will devastate scientific research at America’s universities and badly undermine our nation’s enviable status as a global leader in scientific research and innovation,” the universities wrote in their complaint.
The DOE did not immediately respond to a request for comment on the lawsuit.
The DOE announced Friday that it would cut more than $400 million in annual spending by setting an across-the-board 15% reimbursement rate for indirect costs of research. DOE said that the policy would bring “greater transparency and efficiency” to federal government spending.
Many of the universities involved in the lawsuit have negotiated far higher “indirect” rates than the 15% proposed by DOE policy.
The University of Michigan had an indirect cost rate of 56% in 2024 for its research into nuclear technology, advanced battery technologies, and next-generation engine and fuel technologies, and it would lose $31.1 million in funding if the DOE policy goes forward, according to the lawsuit.
The National Institutes of Health has announced a similar cut to indirect research costs, and was also sued. A federal judge has issued an order blocking the Trump administration from proceeding with those cuts, while the lawsuit over them proceeds.
(Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and Nia Williams)
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