No Subsidies for Wealthy Universities Act

2/13/2025, 9:49 PM

No Subsidies for Wealthy Universities Act

This bill limits the indirect costs that are allowable under federal research awards to institutions of higher education (IHEs) with endowments above specified thresholds. (Generally, indirect costs represent expenses that are not specific to a research project but are needed to maintain the infrastructure and administrative support for federally funded research.)

Specifically, the National Center for Education Statistics (NCES) must annually collect information regarding the endowments of each IHE that has entered into a program participation agreement with the Department of Education.

With this collected information, NCES must identify and make lists of (1) each IHE with an endowment of more than $5 billion, and (2) each IHE with an endowment of more than $2 billion (but not more than $5 billion). NCES must submit these lists to the Office of Management and Budget, which must then distribute the lists to federal agencies, Congress, and the public.

The bill establishes the following limits on the indirect costs allowable under federal research awards:

  • for an IHE with an endowment of more than $5 billion, the IHE is prohibited from using these awards for indirect costs;
  • for an IHE with an endowment of more than $2 billion (but not more than $5 billion), the IHE is limited to an indirect cost rate of 8%; and
  • for all other IHEs, an indirect cost rate of 15%.

The Government Accountability Office must annually report to Congress on indirect cost reimbursement on federal research awards for IHEs.

Bill 119 HR 422, also known as the "Federal Research Award Reimbursement Limits for Indirect Costs for Institutions of Higher Education Act," aims to set limits on the amount of indirect costs that institutions of higher education can receive as part of federal research awards. Indirect costs are expenses that are not directly attributable to a specific research project, such as administrative costs and overhead.

The bill seeks to address concerns about the rising costs of research at universities and the impact that excessive indirect costs can have on the ability of researchers to conduct important studies. By setting limits on the amount of indirect costs that can be reimbursed through federal research awards, the bill aims to ensure that taxpayer dollars are being used efficiently and effectively.

In addition to establishing reimbursement limits for indirect costs, the bill also includes provisions aimed at increasing transparency and accountability in the use of federal research funds. This includes requirements for institutions to report on how indirect costs are being used and to provide justification for any costs that exceed the established limits. Overall, Bill 119 HR 422 is intended to promote responsible stewardship of federal research funds and to ensure that institutions of higher education are using taxpayer dollars in a way that maximizes the impact of research efforts.
Congress
119
Number
HR - 422
Introduced on
2025-01-15
# Amendments
0
Sponsors
+5
Cosponsors
+5

Variations and Revisions

1/15/2025
Text
PDF
XML

Status of Legislation

Bill Introduced
Introduced to House
House to Vote
Introduced to Senate
Senate to Vote

Purpose and Summary

No Subsidies for Wealthy Universities Act

This bill limits the indirect costs that are allowable under federal research awards to institutions of higher education (IHEs) with endowments above specified thresholds. (Generally, indirect costs represent expenses that are not specific to a research project but are needed to maintain the infrastructure and administrative support for federally funded research.)

Specifically, the National Center for Education Statistics (NCES) must annually collect information regarding the endowments of each IHE that has entered into a program participation agreement with the Department of Education.

With this collected information, NCES must identify and make lists of (1) each IHE with an endowment of more than $5 billion, and (2) each IHE with an endowment of more than $2 billion (but not more than $5 billion). NCES must submit these lists to the Office of Management and Budget, which must then distribute the lists to federal agencies, Congress, and the public.

The bill establishes the following limits on the indirect costs allowable under federal research awards:

  • for an IHE with an endowment of more than $5 billion, the IHE is prohibited from using these awards for indirect costs;
  • for an IHE with an endowment of more than $2 billion (but not more than $5 billion), the IHE is limited to an indirect cost rate of 8%; and
  • for all other IHEs, an indirect cost rate of 15%.

The Government Accountability Office must annually report to Congress on indirect cost reimbursement on federal research awards for IHEs.

Bill 119 HR 422, also known as the "Federal Research Award Reimbursement Limits for Indirect Costs for Institutions of Higher Education Act," aims to set limits on the amount of indirect costs that institutions of higher education can receive as part of federal research awards. Indirect costs are expenses that are not directly attributable to a specific research project, such as administrative costs and overhead.

The bill seeks to address concerns about the rising costs of research at universities and the impact that excessive indirect costs can have on the ability of researchers to conduct important studies. By setting limits on the amount of indirect costs that can be reimbursed through federal research awards, the bill aims to ensure that taxpayer dollars are being used efficiently and effectively.

In addition to establishing reimbursement limits for indirect costs, the bill also includes provisions aimed at increasing transparency and accountability in the use of federal research funds. This includes requirements for institutions to report on how indirect costs are being used and to provide justification for any costs that exceed the established limits. Overall, Bill 119 HR 422 is intended to promote responsible stewardship of federal research funds and to ensure that institutions of higher education are using taxpayer dollars in a way that maximizes the impact of research efforts.
Alternative Names
Official Title as IntroducedTo establish Federal research award reimbursement limits for indirect costs for institutions of higher education, and for other purposes.
Policy Areas
Education

Comments

Related

Member:  
Keith Self
Member:  
Andy Harris
Committee:  
Science, Space, and Technology
Committee:  
Education and the Workforce

Recent Activity

Latest Summary4/2/2025

No Subsidies for Wealthy Universities Act

This bill limits the indirect costs that are allowable under federal research awards to institutions of higher education (IHEs) with endowments above specified thresholds. (Gene...

Latest Action1/15/2025
Referred to the Committee on Science, Space, and Technology, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the ...