Sweeping changes to research funding and federal support are dramatically reshaping the education research funding landscape. Federal sources currently account for 55% of total higher education research funding. Of that, the Department of Health and Human Services (HHS), including the National Institutes of Health (NIH), is the largest contributor. This support has long served as the backbone of research funding, but all of that is now threatened, destabilizing the very infrastructure that enables innovation.
While it’s being battled in the courts and headed for appeals, the cap on NIH indirect cost reimbursements at 15% of research costs is having a major impact. Today, institutions typically recover close to 28% in indirect costs, with some research institutions achieving even higher rates. These funds help cover essential research infrastructure like facilities, administrative support, and compliance.
Reducing this support by nearly half would mean institutions have to absorb those costs elsewhere or make dramatic changes to budgets that are already stressed. For many research universities, this could result in fewer resources for labs, limited support staff, and scaling back on the number of active research projects.
The proposed cap is not just a budget adjustment—it’s a structural threat to the viability of higher education research funding.
To get a sense of how widespread this is, take a look at a recently updated list of HHS grants that have been terminated. It’s 48 pages long, and the print’s pretty small. Nearly 220 institutions and research organizations have seen cuts in the billions of dollars.
The ripple effect is significant: promising projects are paused mid-stream, academic research teams are disbanded, and support staff face layoffs. Some institutions have paused accepting graduate students, even those already accepted. Harvard was forced to pause projects on radiation exposure, ALS diagnostics, and tuberculosis treatment.
This kind of instability threatens to erode the research pipeline. Early-career researchers in particular may exit academia in search of more stable environments, leading to a potential brain drain. “In some of these sites, people have to start laying people off now. That just does not come back,” said Sarah Fortune, Professor of Immunology and Infectious Diseases, in Harvard Magazine. “If that expertise disappears, you can’t just rebuild it. It takes decades to build. It would take decades to rebuild.”
Despite these challenges, federal support remains critical to education research funding. With state contributions stagnant and philanthropic dollars unpredictable, federal sources continue to provide the bulk of funding for large-scale, high-impact, and high-risk research.
Losing access to these funds can disproportionately impact institutions that rely on them for biomedical research, climate studies, and other federally aligned initiatives. It also reduces the nation’s capacity for innovation and global competitiveness in science and technology.
As funding becomes less predictable, procurement teams are being asked to do more with less. They must help institutions maintain research momentum by optimizing every dollar spent and streamlining purchasing while still ensuring compliance with complex regulations.
Strategic procurement practices, especially those involving cooperative contracts, are becoming even more essential tools. Cooperative agreements provide access to competitively solicited agreements, inclusive of pre-negotiated pricing, compliant suppliers, and education-specific solutions. This helps universities reduce costs, shorten procurement timelines, and keep essential research tools and services flowing to campuses even when higher education research funding is delayed or canceled.
Collaboration across institutions is also proving invaluable. Cooperative buying models allow institutions to pool resources and access goods, services, and equipment that might otherwise be out of reach. Such partnerships support financial efficiency and promote resilience in the face of federal funding uncertainty.
By working together through E&I Cooperative Services, institutions can sustain the momentum of higher education research while building a more stable, collaborative procurement environment.
The current budget environment demands a proactive response. Institutions must continue to advocate for federal research support while simultaneously finding ways to stretch available funds further.
Smart, strategic procurement practices can help preserve research excellence, protect jobs, and ensure that innovation continues despite tightening budgets. Cooperative contracts offer significant cost reductions versus what academic institutions can generally achieve on their own, while also reducing administrative overhead in procurement.
E&I Cooperative Services has hundreds of competitively solicited cooperative contracts available across nearly every category of goods and services in higher education. With a deep understanding of the unique needs of higher ed procurement teams, E&I’s cooperative agreements align with educational institution’s goals and requirements.
Explore how E&I Cooperative Services, the only member-owned nonprofit sourcing cooperative focused solely on education, can support your institution’s procurement strategy in this time of change.
