UNIVERSITY PARK, Pa. — On May 2, the U.S. National Science Foundation (NSF) issued a statement announcing a “standard indirect cost rate not to exceed 15% to all grants and cooperative agreements awarded to institutes of higher education.” On May 5, the Association of American Universities, the American Council on Education, and the Association of Public and Land-grant Universities, along with 13 research universities, announced that they had filed a joint lawsuit in the United States District Court for the District of Massachusetts to seek to halt the NSF's proposed 15% indirect cost rate. Penn State has submitted a declaration in support of this lawsuit, setting forth the importance of funding from the NSF to the University's research enterprise and to the resulting extraordinary benefits it provides to the nation’s health, prosperity and security.
According to Andrew Read, senior vice president for research, Penn State receives substantial annual funding from the NSF, including to support critical research to develop innovative materials, advance responsible artificial intelligence, strengthen cybersecurity, and study human health and biological organisms. During fiscal year 2024 (FY24), which ran from July 1, 2023, to June 30, 2024, the University reported NSF-funded research expenditures of $85,845,000. This included 783 grants, 103 subawards and five cooperative agreements. With an indirect cost rate of 58.4%, Penn State received approximately $25 million in indirect costs associated with NSF funding in FY24.
“A 15% indirect cost rate applied to our FY24 NSF portfolio would have resulted in a loss of nearly $20 million,” said Read, who signed the declaration. “Such a cut applied to future funding from NSF would have devastating consequences for our ability to conduct essential research on behalf of the federal government.”
Indirect costs support Penn State's ongoing investment in specialized research equipment that drives innovation, such as electron microscopes, mass spectrometers and nuclear magnetic resonance spectrometers. In addition, indirect costs support the administration of research grants and contracts, including meeting extensive compliance requirements, such as those related to radiation safety and hazardous waste disposal.
“Our researchers are some of the best and the brightest in the world, and the work they are doing is not only important here at Penn State but also makes a difference across our commonwealth and the nation and world,” said Penn State President Neeli Bendapudi. “As we continue to consider the situation with NSF and evaluate next steps, I encourage our faculty, staff and students to remain focused on their mission of conducting impactful research and educating the next generation of researchers.”
Read added, “We are advocating for the importance of Penn State’s research, which also includes continuing to partner with our peer institutions, as well as organizations, including the Association of American Universities, the Association of Public and Land-grant Universities, and the American Council on Education. Collectively, our research provides incalculable value, and we must continue to do this work if we are to progress as a society.”
More information about the executive actions affecting the Penn State research community is available here. In addition, the Office of Strategic Communications and the Office of the Senior Vice President for Research have launched a campaign, titled “Research or Regress,” to convey the impacts of research on the health and well-being of Pennsylvanians and beyond.