This is a huge cut. Back of the envelope calculations for UCLA (a big research university with public finance information): $200M cut in operating revenue.

In 2023, UCLA had $270M in indirect costs [1] and they negotiated a rate of 57% with the NIH [2]. So, they had about $473M in direct costs. The new rate would be 15%, which is ~$71M. $270M-$71M = $200M.

[1] Page 24: https://ucla.app.box.com/v/acct-pdf-AFR-22-23 [2] https://ocga.research.ucla.edu/facilities-and-administrative...

Will the institutional endowments agree to meet the gap from investment money? Or, is this moving to student-pays by increased tuition costs?

I haven't been in the grants game for decades. It truly amazed me what capitation fee a US institution expected to apply to a joint application (I was in industry at the time) and since it was US funding it basically consumed 2/3 of the grant. We didn't go ahead.

The rationale which I got was "it's our brand which got you the money, it's our brand on the line" -the first part wasn't true but arguably the second part was.

This is huge cut (saving about 4 billion USD a year). I wonder how it is going to affect the quality of research outcomes. It might actually improve research if it reduces the amount of time researchers spend on administrative duties directly because there are less administrations.

This is crazy. Effectively a $4 billion cut to existing university budgets!?!?