DOGE Is Right. Universities 'Indirect Costs' Are Pure Graft and Should Be Cut.

By Paul Bond, Investigative Reporter, The Kennedy Beacon

The Trump administration’s push to slash billions in university overhead costs hit a judicial snag when a federal judge blocked a 15 percent cap on “indirect costs” tied to research grants, slamming it as “illegal overreach.”

The February ruling, upheld in March by Massachusetts Judge Angel Kelley, halted a major effort by DOGE to curb government waste that’s needlessly lavished on higher education. The White House vows to fight on and an appeal is expected, while protests have erupted at universities.

Today’s universities operate with an air of impunity, especially those with the highest profiles. But many of these same universities have for years been padding their National Institutes of Health (NIH) research grant budgets with indirect costs known as facilities and administration (F&A) fees. This part of the government grant, on average 27-28% higher than the amount designated for the grantee, goes to the university to use as it pleases. The Trump administration wants to cap that percentage at 15%, which could mean billions of dollars in governmental savings.

DOGE is right: F&A fees are pure graft and should be eliminated.

Judge Kelley doesn’t think so. Her ruling isn’t just a policy hiccup — it’s a defining moment in President Donald Trump’s second-term mission to axe government inefficiency.

Supporters of Trump’s plan argue that F&A fees ramp up costs without boosting research breakthroughs, with Elon Musk calling them a “rip off.”

But Judge Kelley, appointed by President Joe Biden in 2021, said Trump’s plan skipped public comment requirements; therefore, she gave academia a reprieve by way of a nationwide injunction. In doing so, she sided with 22 Democrat state attorneys general along with multiple medical associations.

On the other side are taxpayers tired of footing the bill for university excess, and this matters to them big time, with DOGE, MAHA and MAGA supporters viewing it as a stand against a system that’s long dodged accountability.

The NIH said it shelled out roughly $35 billion in grants in fiscal year 2023, with indirect costs eating up $9 billion — 27 percent. But at top schools like Johns Hopkins and Stanford University, the percentage is much higher.

This fight has deep roots. In 1991, Stanford sparked outrage when a Government Accountability Office report caught it billing taxpayers $184,000 for yacht depreciation, $2,000 for flowers and $1,200 for a Paris trip — all as “research support.”

Congress roared, and Stanford’s indirect rate dropped from 78 percent to 55 percent four years later, but the creep returned and by 2000, Stanford hit 58 percent.

According to NIH data, money it doled out for “research project grants” rose 61 percent between 2015 and 2023 while the checks it wrote for “administrative supplements” on those grants soared 177 percent in the same time frame.

Trump took a swing at reining in costs in 2017, aiming for a 10 percent cap and promising $2 billion in savings. Democrats, with the help of The American Association of Universities, killed it, citing thousands of potential lab-job losses.

Now in his second term, Trump and his HHS and DOGE team are angling for a 15 percent cap — projected to save at least $1.5 billion yearly if courts and Big Academia don’t crash the plan.

The legal wrangling, though, hasn’t prevented DOGE from canceling some grants outright. In March, for example, DOGE said it took back $699,000 that had been earmarked for an Ohio State University professor who wanted to research cannabis use by LGBTQ+ women.

Last month, DOGE also posted on X that it canceled grants at other institutions, including $620,000 for preventing teen pregnancy in transgender boys; $740,000 for examining “social networks” among Black and Latino “sexual minority men” in New Jersey; and $75,000 for researching “structural racism.”

The financial stakes for reducing grants that aren’t cancelled outright are even higher. Stanford, for example, received $800 million in NIH funding in 2023 including about $230 million in F&A, thus a 15 percent cap would have cost the school roughly $110 million.

The 15 percent cap that Trump, DOGE and Kennedy are targeting isn’t unreasonable, given the Gates Foundation already caps its private grants at 10 percent, according to the NIH. Other major foundations have a 12 percent cap and many, like Carnegie Corporation of New York, Rockefeller Foundation, Chan Zuckerberg Initiative and more have a 15 percent cap, just as Trump’s NIH is aiming for.

Robert F. Kennedy Jr. is in the process of restructuring the HHS and cutting its budget. While he hasn’t addressed university research grants specifically, he has pledged “radical transparency and returning gold-standard science” to the NIH, FDA and CDC, and to “ending the corruption, ending the corporate capture of those agencies.”

Democrats are pushing back hard, and universities are desperate for their help, given that elite colleges get so much more than the 15 percent proposed cap: At MIT it’s about 55 percent; at Yale it’s around 67 percent; at Harvard it’s roughly 69 percent, and the list goes on.

Beyond high F&A costs in general, critics flag overlap: a $50,000 microscope, for example, might double-dip in direct and indirect budgets, a flaw DOGE aims to fix.

Still, universities plead necessity. Johns Hopkins’ 65 percent rate nets $300 million yearly, per 2024 filings. Cut it, they say, and projects collapse. But private caps mock NIH’s excesses — Gates, for example, reportedly paid zero percent on a few grants.

NIH’s $35 billion in fiscal 2023 fueled 50,000 projects for 300,000 researchers at 2,500 universities, medical schools and research institutions, with each grant padded by overhead. Johns Hopkins alone hosts about 600 NIH trials.

For Trump, Kennedy and Musk, this is a patriotic purge of waste. An upcoming appeal to Judge Kelley’s ruling sets up a slugfest. Universities are bracing for a financial haircut, pro-Trump taxpayers are looking to stick it to bloated academic bureaucrats, and the DOGE reckoning rolls on.

Paul Bond has been a journalist for three decades. He was the Chief Culture Correspondent for Newsweek and has written for USA Today, The Los Angeles Times and elsewhere. He began his career as a crime reporter before spending two decades at The Hollywood Reporter.