By Meredith Asbury
Earlier this year, more than 2,000 individuals from the research community gathered in a virtual town hall to hear about a new approach for determining how the federal government funds university research.
The approach, developed by a team of subject matter experts from across the country, offers an alternative to the existing facilities and administrative (F&A) cost reimbursement system by which the federal government reimburses universities for certain essential costs of conducting research on behalf of the American people.
Now the associations behind the alternative approach are asking Congress to codify it in law and to work with the research community to implement it across the federal government.
The work to develop a new model funding the indirect costs of research began in April of this year, when national organizations representing academic, medical, and independent research institutions came together to form the Joint Associations Group (JAG) on Indirect Costs.
Indirect costs, as the JAG explains, are the essential costs universities incur when conducting federally funded research.
For example, scientists require laboratories and other research facilities with high-tech equipment, support staff, data storage and processing tools, high-speed internet, and more to produce research safely, ethically, and in compliance with numerous federal and state regulatory requirements.
The federal government usually reimburses a portion of these indirect costs so that universities can provide scientists with the resources they need to deliver research breakthroughs that boost our nation’s economic and social wellbeing. (Universities spend billions of their own dollars every year to cover what the federal government does not.)
But members of Congress have been, for a while, calling for a new approach for funding indirect costs that is easier to understand and provides greater transparency and accountability to taxpayers regarding the true costs of federally funded research.
To develop the alternative model, the JAG convened a group of subject-matter experts, which met and sought feedback from the research community for months before it eventually released the Financial Accountability in Research (FAIR) model.
The FAIR model not only addresses lawmakers’ concerns, but also offers an alternative to the arbitrary, across-the-board 15% caps on indirect cost rates that many federal agencies attempted to impose earlier this year. (The caps have not yet been implemented because of ongoing litigation.)
Members of Congress appear to have embraced JAG’s efforts to develop an alternative approach; they have inserted language into several FY26 federal spending bills and their accompanying reports encouraging the administration to work with the research community to develop and implement an alternative, new, government-wide model for calculating and funding the true costs of research.
The AAU Board and leaders of nine associations that comprise JAG recently issued statements endorsing the FAIR model and encouraging lawmakers and the administration to work with the research community to codify it into law.
The association leaders said: “The scientific and economic dominance of the United States is, in part, because federal policy has long recognized that high-quality research requires support not just for people and lab supplies, but also for the scientific facilities, infrastructure, and services” that are integral parts of that research.
They continued: “The U.S. research enterprise is the envy of the world, and even as our global competitors strive to emulate it, we have an opportunity to continue to improve our methods for supporting research that advances the best ideas and opportunities for technological innovations.”
Congress and the federal government should now seize that opportunity and ensure that our nation continues leading the world in scientific innovation.
Meredith Asbury is assistant vice president for government relations and public policy at AAU.