As American society grows and furthers itself, medical advancements and research are vital to changing humanity’s trajectory and quality of life.
On Feb. 7, 2025, the Trump administration proposed a new policy reducing the size of grants for institutions conducting medical services to a set 15 percent rate.
According to the New York Times, this policy aims to reduce funding for indirect costs and would save around $4 billion a year.
However, the policy heavily affects institutions.

An Upshot analysis estimates that the new rate would reduce grant funding supported by the National Institutes of Health (NIH) by at least $5 billion.
Since 1950, the NIH has provided overhead funds in a formulaic way to best support universities in their research.
Additionally, in 1965, they calculated individual rates for each institution depending on need and level of research.
According to the New York Times, the NIH spent at least $32 billion on approximately 60,000 grants supporting medical research in vital fields such as cancer, genetics, and infectious diseases.
Dividing up the large sum of money, $23 billion was focused on “direct” research costs, including equipment and researcher’s salaries.
The remaining $9 billion went to “indirect costs,” including laboratory upkeep,

administrative staff, utility bills, and access to hazardous materials disposal.
Within the medical institutions affected by the new policy, universities reliant on federal funding are forced to formulate new approaches.
Specifically, many university officials have said they may have to decrease medical and scientific research.
In an interview with the New York Times, the senior director for science policy at the Association of American Medical Colleges, Heather Pierce, stated, “It’s not an overstatement to say that a slash this drastic in total research funding slows research.”
In response to the decreased funding, various universities and associations have taken legal action by suing the NIH.
The Association of American Medical Colleges has sued to block the policy as it would “affect anyone who depends on the development of new treatments, medical interventions, and diagnostic tools,” according to the New York Times.
Among the universities fighting back, Harvard University’s Vice Provost for Research, John H. Shaw, submitted a legal filing supporting universities suing the NIH.
According to Shaw, Harvard’s NIH indirect rate was 69 percent last year, with $135 million of its indirect cost expenses covered.
Under the new policy, Harvard would receive a significant reduction with only $31 million towards research and medical advancements.
The funding reductions would also have various regional effects as certain areas have higher concentrations of medical research.
For example, states like North Carolina, Missouri, and Pennsylvania could face less educational funding than others due to their present medical programs.
In defense of their policy, the NIH noted that these institutions “often accept grants from charitable foundations that offer much lower overhead rates than the federal government,” which they claim demonstrates that “universities and hospitals willingly pursue research opportunities with less supplemental funding.”
Additionally, the White House indicated they would reserve savings for additional research grants.
White House spokesperson Kush Desai stated, “Redirecting billions of allocated NIH spending away from administrative bloat means there will be more money and resources available for legitimate scientific research.”
The policy could further connect universities with private foundations that pay less than the government for indirect costs.

However, the former chancellor of UNC-Chapel Hill stated in an NPR interview that, “[private] foundations were not part of the social contract that led to the development of the federal research enterprise” and “those funds are actually defraying additional funds for direct costs that the federal government might have had to provide to do the same research.”

“A lot of the larger [universities] would have to find $150 million or even $200 million every year,” stated Thorp, “to replace the money that they are getting from the federal government.”
As the government reduces educational aid to universities, many research institutions have said they would adjust by simply reducing their medical research, with some even considering banning research altogether.

Government funds saved from implementing this policy could benefit other areas of society in need of increased attention, such as healthcare or housing.
However, the decrease in medical research could negatively affect millions in America as advancements and research on illnesses and ailments steadily slow.