The National Institutes of Health reported it will issue grant cuts that fund research institutions across the country, the agency announced Friday. This announcement could impact Penn State’s research abilities by reducing its funding.   

Andrew Read, senior vice president for research, and Karen Kim, dean of the College of Medicine, released a statement with details regarding the cuts.

“Our leadership team, including our government relations and legal teams, is working closely with our peers and national organizations — including the Association of American Universities (AAU), the Association of Public and Land-grant Universities (APLU), the American Council on Education (ACE), Council on Governmental Relations (COGR) and the Association of American Medical Colleges — to assess the potential impact and to advocate strongly,” the statement read.  

The cut limits indirect cost recovery for research projects to 15%. This applies to any new grants and current grants that include expenses that would be incurred beginning February 10.  

Looking at this change from Penn State’s last financial year, there would have been a loss of $35.2 million. With this change, Penn State’s current financial year is expected to look similar, which could shift the funding policy and impact the conduction of groundbreaking research.

When Penn State conducts research for the federal government, it incurs costs reclaimed through a negotiated rate between the university and the government.

“Performing research on behalf of federal agencies results in a variety of expenses that would not otherwise be incurred by universities. All universities have indirect costs, and for most, this drastic cut would be devastating, and universities could not operate in the way we do now, if these costs were not recouped,” the statement continued. 

Read and Kim said in the statement they are working diligently to understand what this change implies for Penn State and recognize that other funding agencies could take similar actions.