UH response to NSF Policy 25-034: Implementation of a Standard 15% Indirect Cost Rate

A message from UH Vice President for Research and Innovation Vassilis L. Syrmos in an email dated May 6:

Dear UH research community:

With the recent National Science Foundation (NSF) policy notice that it will cap indirect cost recovery at 15% for all new proposals and grants awarded on or after May 5, 2025, it is important to understand the impact of this drastic cut to the University of Hawaiʻi (UH) and universities across the country. This move follows similar 15% rate caps announced by the National Institutes of Health (NIH) and the Department of Energy (DOE). Injunctions are in place for the NIH and DOE policies, but the trend is clear and deeply concerning.

While the NSF policy does not apply retroactively, acceptance of the lower 15% indirect cost rate would severely limit our ability to carry out the type of groundbreaking, high-impact research that UH is known for. It undermines the systems necessary for successful research operations. Without sufficient indirect cost recovery, UH will not be able to maintain the critical infrastructure at the central office and department levels to support the work of our researchers.

In light of the gravity of the situation, we want to make it clear that UH, in alignment with many other institutions across the country, will not accept the 15% indirect cost rate for new NSF awards. For one, accepting grants under this new rate would undermine our legal right to challenge the lower reimbursement rate. Most importantly, accepting this lower indirect cost rate would significantly hinder our ability to continue supporting our research activities at the level necessary for successful operations. This decision is not taken lightly, but we must prioritize the long-term sustainability of our research endeavors.

The Association of Public and Land-grant Universities, alongside the Association of American Universities and the American Council on Education, has filed a lawsuit challenging the NSF’s decision. Furthermore, we will continue to actively work with the State Attorney General to best protect UH’s interests in future litigation.

Guidance for NSF proposals and awards

For NSF proposals submitted after May 5, 2025, UH will continue to require preparation of the budget request utilizing UH’s full indirect cost rate as approved by our federal cognizant agency. Application of the full rate will be deemed to apply even if the NSF funding opportunity announcement specifically references use of the capped rate.

Furthermore, UH cannot and will not accept any awards from NSF that are issued using the lower 15% indirect cost rate.

We understand that this decision may have immediate implications for your research plans, but please know that we are here to support you through this challenging period. Please contact me at syrmos@hawaii.edu for questions.

Sincerely,
Vassilis L. Syrmos
Vice President for Research and Innovation