Michigan Attorney General Dana Nessel has sued the Trump administration over a policy that would cause major universities and hospitals in Michigan to lose more than $300 million in research funding.
President Donald Trump’s new administrative policy would cause the National Institutes of Health to limit funding granted by the federal government. Hospitals, as well as major universities across the country, will have major budget costs towards clinical research on major diseases such as cancer, genetics and infectious diseases.
As a response to the budget cuts, Attorney Generals from different states across the country, including Michigan, have come prepared with lawsuits in response to their alleged unlawful actions.
On Feb. 7, the National Institutes of Health sent out a statement on X, stating their reason for the decision.
“Last year, $9B of the $35B that the National Institutes of Health (NIH) granted for research was used for administrative overhead, what is known as ‘indirect costs.’ Today, NIH lowered the maximum indirect cost rate research institutions can charge the government to 15%, above what many major foundations allow and much lower than the 60%+ that some institutions charge the government today. This change will save more than $4B a year effective immediately,” the National Institutes of Health said.
Indirect costs help cover laboratories, utilities and support staff — things that are often not considered when gaining direct funding through grants. The new 15% ceiling imposed on direct research costs would cause universities such as the University of Michigan to lose more than $200 million in grants. Oakland University received nearly $5 million in grants in 2024. However, OU could now be expected to lose $720k if the budget cuts go into effect.
However, some praised the NIH for their decision to cut excessive funding.
“Indirect costs can lack transparency, acting as a ‘black box,’ but they do support vital infrastructure and key functions critical to scientific process,” Dr. Nicholas S. Piuzzi said in response to the NIH post. “I agree with the decision to cap rates at 15%, but it’s crucial to balance accountability with the real needs of research funding. If done right, this could spark innovation without slowing progress.”
On Feb. 10, Michigan Attorney General Dana Nessel, along with 22 other attorney generals, sued the Trump Administration, the Department of Health and Human Services (DHHS) and the National Institutes of Health for their act of cutting funds that would support medical research in universities and hospitals across the country. Nessel released a video to the citizens of Michigan expressing her decision to lead the lawsuit.
“This funding supports life-saving research, on research on all kinds of life-threatening public health diseases, viruses and conditions. And these dangerous proposed cuts are indiscriminate and without purpose,” Nessel said. “The federal government has an obligation to stop breaking their promises made to the American people, which is exactly what has happened here.”
A federal judge has put a halt to the policy and has allowed the Attorney Generals to present their arguments for enacting the budget on Feb. 21. Many universities and hospitals across the nation must now plan their next steps for the financial losses in much of their medical research.
