The University of Utah has joined a lawsuit against the National Institute of Health’s (NIH) cut on research funding, which a federal judge stalled Monday.
The lawsuit is headed by the Association of American Medical Colleges (AAMC). It’s part of the U’s short-term plan to counter this “imminent threat” to its research community, U President Taylor Randall said at a town hall webinar Tuesday.
“The second piece will be a longer-term strategy of advocacy,” he said. “It will occur both locally in our legislature, but also nationally with our federal delegation.”
The U will not have any layoffs or see a hiring freeze as the litigation continues, Vice President for Research Erin Rothwell added.
On Feb. 7, the NIH announced a reduction in the reimbursement rate for facilities and administrative (F&A) costs, also known as indirect costs, to 15%. Currently, the average indirect costs rate on NIH grants hovers around 28%.
Indirect costs support multiple research projects and include expenses for equipment, infrastructure, personnel salaries and administrative overhead.
Impacts at the U
The U received 67 grants from the NIH in the 2025 fiscal year, totaling over $23 million in research funding. The U is still assessing the financial impact a 15% F&A cost would have on the university, Rothwell said.
“We are actively quantifying the impact that a 15% cap would have,” she said. “And we have the reserves to continue to fund our employees through the rest of this year if that happens.”
NIH’s announcement states the reason for the policy change is because indirect costs are difficult for the agency to oversee. It also noted that universities accept grants from private foundations that offer much lower indirect cost rates compared to the federal government.
However, most of the research private foundations fund is different from the discovery science conducted by R-1 research institutions like the U, Rothwell said. She added that a lot of foundation grants the U receives rely on the research infrastructure paid for by federal grants and state investments.
The research funding cut comes almost a month after the Trump administration issued a memo pausing all federal funding before quickly rescinding the directive. The NIH suspended all communications with grant recipients after the directive. Rothwell said NIH’s communication freeze had not been fully lifted yet.
AAMC’s lawsuit coincides with another lawsuit filed by 22 states. Court hearings for both lawsuits will be held on Feb. 21.
