The Department of Defense is planning to cap indirect cost reimbursement rates for higher education institutions at 15 percent, according to a May 14 memo signed by Secretary of Defense Pete Hegseth.
“The Department of Defense (DoD) is the steward of the most critical budget in the Federal Government—the budget that defends our Nation, equips our warfighters, and secures our future. That stewardship demands discipline. It demands accountability. And it demands that we say no to waste,” wrote Hegseth.
The memo directs the DOD to develop the new policy within 21 days, marking the fourth federal agency—including the National Institutes of Health, the Department of Energy and the National Science Foundation—that has enacted a plan to cap indirect cost rates at 15 percent. For decades, universities have negotiated with the federal government to calculate bespoke indirect cost reimbursement rates to pay for research costs that support multiple grant-funded projects, such as facilities maintenance, specialized equipment and administrative personnel. (The paragraph has been updated.)
Universities and their trade associations have already sued the NIH, DOE and NSF over these plans, arguing that capping indirect costs would hurt research production and compromise global competitiveness, all while violating multiple aspects of the Administrative Procedure Act, including bypassing congressional authority required to alter indirect cost rates. So far, federal judges have blocked indirect cost caps from taking effect at the NIH and DOE. The NSF agreed to pause the cap until June 13 in order to proceed to summary judgment, which is a way to resolve the case quickly without a full trial.
Matt Owens, president of COGR, which represents research institutions, condemned the DOD’s newly announced plan.
“DOD research performed by universities is a force multiplier and has helped to make the U.S. military the most effective in the world. From GPS, stealth technology, advanced body armor, to precision guided missiles and night vision technology, university-based DOD research makes our military stronger,” Owens said in a statement. “A cut to DOD indirect cost reimbursements is a cut to national security. Less funding for research means less security for our nation.”
Hegseth’s memo claimed that capping the Defense Department’s indirect cost rate for universities would “save up to $900 [million] per year on a go-forward basis,” while also claiming that the department’s “objective is not only to save money, but to repurpose those funds—toward applied innovation, operational capability, and strategic deterrence.” The NIH has also made similarly incompatible assertions. It touted on social media its indirect rate cap plan’s potential to save taxpayers more than $4 billion, while a lawyer for the NIH told a federal judge that the cut was simply a reallocation of funds.
The Defense Department’s plans “will not stop at new grants,” Hegseth wrote, adding that “meaningful savings can also be achieved by revisiting the terms of existing awards to institutions of higher education.” The memo directed the under secretary of defense for research and engineering to do the following within 30 days:
Initiate a departmentwide effort to renegotiate indirect cost rates on existing financial assistance awards to institutions of higher education. “Wherever cooperative, bilateral modification is possible, it shall be pursued.”
“Where bilateral agreement is not achieved, identify and recommend lawful paths to terminate and reissue the award under revised terms.”
“Complete renegotiations or terminations for all contracts by 180 days from the date of this memorandum.”
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Dive Brief:
A group of universities and higher education associations is suing theNational Science Foundationover its new cap on reimbursement for indirect research costs for all future college grants.
In court documents filed Monday, the plaintiffs — led by the American Council on Education, the Association of American Universities and the Association of Public and Land-Grant Universities — allege the unilateral 15% cap, which took effect May 5, violates the law in “myriad respects” and that its effects will be “immediate and irreparable.”
The new lawsuit follows two other legal challenges over similar caps implemented by the National Institutes of Health and the U.S. Department of Energy — both of which have been blocked, at least temporarily.
In the ruling, the judge said NIH unlawfully implemented the cap and violated constitutional prohibitions on applying new rules retroactively. The Trump administration quickly appealed the ruling, and the case is ongoing.
Next came the Energy Department. In April, the agency announced the same 15% cap on indirect research costs,alleging the plan would save taxpayers $405 million annually. Again, colleges sued, and a federal judge blocked the plan — albeit temporarily — while the lawsuit moves forward.
The ACE, AAU and APLU are plaintiffs in both cases.
Now NSF has introduced its own cap, to the chagrin of colleges and higher ed experts. When announcing the 15% cap, the agency argued the move would streamline and add transparency to the funding process and“ensure that more resources are directed toward direct scientific and engineering research activities.”
But the new lawsuit argues that NSF’s policy echoes the other agencies’ attempts, to deleterious effect.
“NSF’s action is unlawful for most of the same reasons, and it is especially arbitrary because NSF has not even attempted to address many of the flaws the district courts found with NIH’s and DOE’s unlawful policies,” it said.
Like the lawsuits against NIH and Energy Department’s policies, the plaintiffs allege that the NSF’s cap oversteps the agency’s authority.
“It beggars belief to suggest that Congress — without saying a word — impliedly authorized NSF to enact a sweeping, one-size-fits-all command that will upend research at America’s universities,” it said.
In fiscal 2024, Congress gave NSF $7.2 billion to fund research and related activities. In turn, the agency funded projects at 1,850 colleges —more than 1 in 4 of the higher education institutions in the U.S. eligible to receive federal dollars.
That year, NSF awarded Arizona State University, one of the plaintiffs, 172 awards worth a total of $197.5 million in anticipated and obligated funding, according to court documents. Prior to the NSF’s new policy, the institution negotiated a 57% rate for indirect costs in fiscal 2026.
The University of Illinois, another plaintiff, receivedjust over $129 millionin NSF funding in fiscal 2024 —making the agency its biggest funder — and negotiated an indirect research funding rate of 58.6%.
The university said in court documents that it has received the most NSF funding of all U.S. colleges for six years in a row, and it is poised to lose more than $23 million a year if the agency’s new cap is allowed to continue.
The college plaintiffs are:
Arizona State University.
Brown University, in Rhode Island.
California Institute of Technology.
The University of California.
Carnegie Mellon University, in Pennsylvania.
The University of Chicago.
Cornell University.
The University of Illinois.
Massachusetts Institute of Technology.
The University of Michigan.
The University of Minnesota.
The University of Pennsylvania.
Princeton University, in New Jersey.
The lawsuit also cited an attempt by the first Trump administration to cap rates for indirect research at a federal agency. In 2017, the White House proposed cutting the cap to 10% for all NIH grants. Congress – then under Republican control as it is now — “identified serious problems immediately” and took “swift and bipartisan” action against the proposal, the lawsuit said.
A coalition of universities and trade groups is suing the National Science Foundation over the independent federal agency’s plan to cap higher education institutions’ indirect research cost reimbursement rates at 15 percent.
In the lawsuit, filed Monday in the U.S. District Court for the District of Massachusetts, the same day the NSF’s new policy went into effect, the coalition argued that a cut would risk the country’s standing “as a world leader in scientific discovery” and “the amount and scope of future research by universities will decline precipitously.”
It warned that “vital scientific work will come to a halt, training will be stifled, and the pace of scientific discoveries will slow” and that “progress on national security objectives, such as maintaining strategic advantages in areas like AI and quantum computing, will falter.”
Plaintiffs in the lawsuit include the American Council on Education, the Association of American Universities, the Association of Public and Land-grant Universities, and 13 universities, including Arizona State University, the University of Chicago and Princeton University.
They attest that the NSF violated numerous aspects of the Administrative Procedure Act, including bypassing Congress to unilaterally institute an “arbitrary and capricious” 15 percent rate cap and failing to explain why it’s only imposing the policy on universities.
The NSF awarded $6.7 billion to some 621 universities in 2023.
Indirect costs fund research expenses that support multiple grant-funded projects, including computer systems to analyze enormous volumes of data, building maintenance and waste-management systems. In 1965 Congress enacted regulations that allow each university to negotiate a bespoke reimbursement rate with the government that reflects institutional differences in geographic inflation, research types and other variable costs.
Typical negotiated NSF indirect cost rates for universities range between 50 and 65 percent, according to the lawsuit.
And while the Trump administration has claimed that indirect cost reimbursements enable wasteful spending by universities, the plaintiffs note that an existing cap on administrative costs means that universities already contribute their own funds to cover indirect costs, “thereby subsidizing the work funded by grants and cooperative agreements.” In the 2023 fiscal year, universities paid $6.8 billion in unrecovered indirect costs, the lawsuit read.
The NSF is the third federal agency that has moved to cap indirect research costs since President Donald Trump took office in January; federal judges have already blocked similar plans from the National Institutes of Health and the Department of Energy.
“NSF’s action is unlawful for most of the same reasons,” the lawsuit read, “and it is especially arbitrary because NSF has not even attempted to address many of the flaws the district courts found with NIH’s and DOE’s unlawful policies.”
A federal judge temporarily blocked the U.S. Department of Energy’s plan to cap universities’ indirect research cost reimbursement rates, pending a hearing in the ongoing lawsuit filed by several higher education associations and universities.
Judge Allison D. Burroughs of the U.S. District Court for Massachusetts wrote in the brief Wednesday order that the plaintiffs had shown that, without a temporary restraining order, “they will sustain immediate and irreparable injury before there is an opportunity to hear from all parties.”
Plaintiffs include the Association of American Universities, the American Council on Education, the Association of Public and Land-grant Universities and nine individual universities, including Brown, Cornell and Princeton Universities and the Universities of Michigan, Illinois and Rochester. They sued the DOE and department secretary Chris Wright on Monday, three days after the DOE announced its plan.
Department spokespeople didn’t return Inside Higher Ed’s requests for comment Thursday afternoon.
DOE’s plan is to cap the reimbursement rates at 15 percent. Energy grant recipients at colleges and universities currently have an average 30 percent indirect cost rate. The Trump administration has alleged that indirect costs are wasteful spending, although they are extensively audited.
The DOE sends more than $2.5 billion a year to over 300 colleges and universities. Part of that money covers costs indirectly related to research that may support multiple grant-funded projects, including specialized nuclear-rated facilities, computer systems and administrative support costs.
The department’s plan is nearly identical to a plan the National Institutes of Health announced in February, which a judge also blocked.
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A federal judge Wednesday temporarily blocked the U.S. Department of Energy from implementing a 15% cap on grant funding for indirect costs. The ruling came just days after a dozen higher education associations and colleges sued the department, calling the new policy an overstep of authority and a threat to U.S. research and advancement.
In the ruling Wednesday, U.S. District Judge Allison Burroughs said the plaintiffs — including higher ed groups like the American Council on Education and threatened colleges like the University of Michigan and Brown University — had successfully demonstrated that they would “sustain immediate and irreparable injury” if the policy were allowed to proceed in tandem with the lawsuit.
Burroughs’ temporary restraining order bars the Energy Department — until further court order — from terminating grants, either under the challenged policy or “based on a grantee’s refusal to accept an indirect cost rate less than their negotiated rate.” The judge is also requiring the department to submit biweekly reports confirming that the federal funds are being distributed during the pause.
When announcing the funding cap last Friday, the Energy Department said the move would save $405 million annually and reduce what it called inefficient spending. Indirect research costs typically include overhead expenses such as facilities and administrative support staff.
The department said the change would affect over 300 colleges and that it would terminate grants to any institutions that failed to comply.
But the plaintiffs said the policy’s rapid implementation would give institutions no choice but to scale back funding and lay off staff.
Their lawsuit, filed in U.S. District Court in Massachusetts, called the Energy Department’s policy “a virtual carbon copy” of one announced in February by the National Institutes of Health. A federal judge permanently blocked NIH’s planto cap indirect cost funding at 15% earlier this month, a decision the agency quickly appealed. The NIH plan would cost research universities billions in annual funding.
“DOE’s action is unlawful for most of the same reasons and, indeed, it is especially egregious because DOE has not even attempted to address many of the flaws the district court found with NIH’s unlawful policy,” the plaintiff’s lawsuit said.
The next hearing in the case is set for April 28 before the same court.
Curriculum assessment and evaluation projects may not always spark immediate enthusiasm, but a recent well-organized team project in our higher education program demonstrated the power of collaboration. Thanks to the incredible participation of our faculty, improvements in student learning were not just planned, but successfully implemented. The changes made as part of this academic assessment/evaluation project to enhance student success yielded significant improvements. The positive impact on student learning results is rewarding when the impact on student learning results is positive!
The measures are crucial to our curriculum assessment/evaluation, program accreditation, and appraising evidence of student success. A key aspect of our approach is the use of both indirect and direct measures to gauge student learning within program and course assessments. This method allows us to redesign course assessments, incorporating authentic direct and indirect measures to foster student success.
What is a Direct Measure Assessment?
Our program faculty evaluated and updated our program curriculum, including assessment measures, as an aspect of continuous quality improvement within our educational assessment program. A direct measure objectively quantifies student learning (Bugeja & Garrett, 2019). It is crucial that these direct measures, which include course assignments (for example, papers, demonstrations, worksheets, presentations, virtual simulations, live simulations), examinations, capstone projects, student portfolios, and internship evaluations (Bugeja & Garrett, 2019), align with learning outcomes. This alignment ensures that the assessment accurately reflects the intended learning goals.
Well-constructed rubrics further enhance the quality of the assessment measure by communicating the criteria to the student and increasing the objectivity of the measure (Postmes et al., 2023). Linking examinations to learning outcomes and blueprints (List of topics the examination is assessing) increases authenticity (Abdellatif & Al-Shahrani, 2019). See the sample alignment template included at the end of this article.
What is an Indirect Measure Assessment?
An indirect measure is a subjective perception of the experience (Bugeja & Garrett, 2019). Examples of indirect measures include surveys (student, employer), focus groups, and exit interviews (Bugeja & Garrett, 2019). Indirect measures should not solely measure a course outcome or competency but should support a direct assessment measure. For example, in a major course assignment or project such as a Change Theory Application Project paper or poster presentation (direct measure), the student also completes a reflective self-evaluation survey of the project specific to learning outcomes or competencies (indirect measure). The indirect measure is valuable because it provides a different perspective but supports the direct measure.
Implementing Direct and Indirect Assessments
The program-level outcomes measure student success at program graduation. They are also known as end-of-program outcomes or terminal program outcomes. Course-level outcomes should match the attainment of the program-level outcomes.
After reviewing program-level assessment plans, the focus becomes the course level. We recommend reviewing and updating an existing alignment table or creating one that includes the course outcomes, module/unit objectives, competencies, learning activities, and assessments (modify the items per your school). We have included a sample alignment table at the end of this article. The alignment table map helps check the Revised Bloom’s Taxonomy Leveling and ensures all course outcomes and competencies link to course assessments (direct and indirect measures).
Next, examine the current course assessments. Identify course assessments worthy of updating and revision or develop a new assessment measure. Use mostly direct assessments with a few supporting indirect assessments, such as exit evaluations, focus groups, alums, and employer surveys. Remember, an indirect assessment should only add another viewpoint that supports the direct assessment measure.
Map the course outcomes, module learning objectives, course-assigned knowledge, skills, attitudes/values, competencies, and learning activities (for example, readings, videos, posters) in an alignment table. Add the final assessments to the alignment table after updating course assessment measures. Check that most measures are direct and that all course outcomes, objectives, and competencies link to a direct measure. Use only a few supporting indirect measures to safeguard genuine assessment of learning.
Summary
Educational assessment is valuable for informing curricula, demonstrating student learning, and determining program effectiveness for academic accreditation. Using direct and indirect measures in education provides data about student learning and program evaluation. Alignment mapping can help plan and check for consistency in the course. Multiple data measures, such as direct measures and a few supporting indirect measures, increase confidence in the findings and analysis, known as triangulation (Demeter et al., 2019). After completing course revisions with a particular emphasis on using direct and indirect assessment measures, we have noted improvements in student learning assessment at the course level.
Course Level Alignment Table Map
Course Outcomes
Module Objectives
Course Competencies
Learning Activities
Course Learning Assessments (Identify Direct and Indirect Measures)
Course Level Alignment Table Map Tips:
Add and delete rows and columns as needed.
The verb levels in the outcomes, objectives, and competencies should align with the learning activities and assessment measures.
Not all courses will have competencies; this may vary depending on the discipline.
Colleges and universities vary in the word use of outcomes and objectives, so modify the headings in the alignment table to match your school.
Nancyruth Leibold, EdD, RN, MSN, PHN, CNE, AHN-BC is an Associate Professor of Nursing at Minnesota State University, Mankato. Nancyruth is the Health Sciences Editor at Multimedia Educational Resource for Learning and Online Teaching (MERLOT).
Laura Schwarz, DNP, RN, PHN, CNE, AHN-BC is a Professor at Minnesota State University, Mankato. Laura is a Certified Peer Reviewer for Quality Matters.
References
Abdellatif, H., & Al-Shahrani, A. M. (2019). Effect of blueprinting methods on test difficulty, discrimination, and reliability indices: cross-sectional study in an integrated learning program. Advances in Medical Education and Practice, 10, 23–30. https://doi.org/10.2147/AMEP.S190827
Bugeja, M., & Garrett, M. (2019). “Making the connection”: Aggregate internship data as direct and indirect measure informing curricula and assessment. Journalism & Mass Communication Educator, 74(1), 17–30. https://doi.org/10.1177/1077695817749077
Demeter, E., Robinson, C., & Frederick, J. G. (2019). Holistically assessing critical thinking and written communication learning outcomes with direct and indirect measures. Research & Practice in Assessment, 14(1), 41-51.
Postmes, L., Bouwmeester, R., de Kleijn, R., & van der Schaaf, M. (2023). Supervisors’ untrained postgraduate rubric use for formative and summative purposes. Assessment and Evaluation in Higher Education, 48(1), 41–55. https://doi.org/10.1080/02602938.2021.2021390
