This page will be updated regularly to provide new information as it becomes available regarding the AAU-ACE-APLU legal action contesting the Department of Defense cutting reimbursement rates to 15%. Stay tuned.
February 18, 2026 Update: On February 18, 2026, the 1st U.S. Circuit Court of Appeals issued an order granting the Trump Administration's unopposed motion to voluntarily dismiss its appeal. As a result of this dismissal, the United States District Court for the District of Massachusetts decision vacating and declaring invalid the DOD’s 15% indirect cost rate policy, including the May 2025 Hegseth memo and the June 2025 Michael memo, stands and is now permanent with no option for further appeal.
February 10, 2026 Update: On February 10, 2026, the Trump Administration filed a motion to dismiss its appeal in the 1st U.S. Circuit Court of Appeals in the AAU, ACE, APLU case challenging the Department of Defense’s policy to cap indirect costs at 15%.
December 9, 2025 Update: On Tuesday December 9, the government filed an appeal of the U.S. District Court for the District of Massachusetts’ decision vacating the Department of Defense policy capping indirect costs at 15%. The government’s appeal brief will likely be filed within 40 days.
October 15, 2025 Update: On Wednesday October 15, Judge Brian E. Murphy of the United States District Court for the District of Massachusetts issued a final judgment in AAU’s joint lawsuit, vacating the Department of Defense policy capping indirect cost rates at 15%. Judge Murphy issued a declaratory judgment vacating the May 14, 2025, Hegseth memo and the June 12, 2025, Michael memo and finding the policy “invalid, arbitrary and capricious, and contrary to law.” The government has 60 days to file an appeal with the 1st Circuit Court of Appeals.
July 18, 2025 Update: U.S. Judge Brian E. Murphy issued an order granting a preliminary injunction that halts the Department of Defense from “implementing, instituting, maintaining, or giving effect to the immediately effective portions of the Rate Cap Policy, i.e., those portions implementing a 15% cap for all awards issued on or after June 12, 2025, including but not limited to rejecting or treating adversely proposals for DOD funding submitted at universities’ negotiated rates rather than the 15% rate”. The injunction covers the universities who joined the lawsuit, all members of the organizational plaintiffs including AAU, and also any situation where covered institutions are a sub-grantee or collaborator.
June 17, 2025 Update: U.S. Judge Brian E. Murphy issued a temporary restraining order (TRO) that covers all institutions in all states nationwide in the case filed by AAU, APLU, ACE, and 12 impacted higher education institutions against the U.S. Department of Defense. The judge’s order prevents the administration "....implementing, instituting, maintaining, or giving effect to the immediately effective portions of the Rate Cap Policy, i.e., those portions implementing a 15% cap for all awards issued on or after June 12, 2025, including but not limited to rejecting or treating adversely proposals for DOD funding submitted at universities’ negotiated rates rather than the 15% rate."