No Subsidies for Wealthy Universities Act
No Subsidies for Wealthy Universities Act
Plain Language Summary
# No Subsidies for Wealthy Universities Act – Summary **What It Does:** This bill would limit the amount of indirect costs that wealthy universities can charge to federal research grants. "Indirect costs" are overhead expenses—like maintaining buildings, administrative staff, and facilities—that universities add on top of the actual research costs when they receive federal funding. The bill targets universities with large endowments (savings/investments), capping how much of these indirect costs the government will reimburse for the wealthiest institutions. **Who It Affects:** The bill specifically targets universities with endowments over $2 billion. It requires the federal government to annually track and list universities with endowments exceeding $5 billion and those between $2-5 billion, then share that information with federal agencies and Congress.
This would primarily impact well-established, affluent institutions like Harvard, Yale, and similar universities with large financial reserves. **Current Status:** The bill (HR 422) was introduced by Rep. Ben Cline (R-VA) in the 119th Congress and is currently in committee, meaning it has not yet been debated or voted on by the full House. No action has been taken since its introduction.
CRS Official Summary
No Subsidies for Wealthy Universities ActThis bill limits the indirect costs that are allowable under federal research awards to institutions of higher education (IHEs) with endowments above specified thresholds. (Generally, indirect costs represent expenses that are not specific to a research project but are needed to maintain the infrastructure and administrative support for federally funded research.)Specifically, the National Center for Education Statistics (NCES) must annually collect information regarding the endowments of each IHE that has entered into a program participation agreement with the Department of Education.With this collected information, NCES must identify and make lists of (1) each IHE with an endowment of more than $5 billion, and (2) each IHE with an endowment of more than $2 billion (but not more than $5 billion). NCES must submit these lists to the Office of Management and Budget, which must then distribute the lists to federal agencies, Congress, and the public.The bill establishes the following limits on the indirect costs allowable under federal research awards:for an IHE with an endowment of more than $5 billion, the IHE is prohibited from using these awards for indirect costs;for an IHE with an endowment of more than $2 billion (but not more than $5 billion), the IHE is limited to an indirect cost rate of 8%; andfor all other IHEs, an indirect cost rate of 15%.The Government Accountability Office must annually report to Congress on indirect cost reimbursement on federal research awards for IHEs.
Latest Action
Referred to the Committee on Science, Space, and Technology, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.