Louisiana universities could lose tens of millions if federal research cuts go into effect 

by Piper Hutchinson, Louisiana Illuminator
February 12, 2025

Louisiana universities could lose tens of millions of dollars in federal funding under a proposed slash in National Institutes of Health research funding President Donald Trump’s administration has put forward. 

A federal judge has temporarily blocked the Trump administration’s plan to slash “indirect cost” rates including on grants that are already approved. The ruling was issued late Friday afternoon and challenged in court Monday. The next hearing in the case is expected later this month. 

If the cuts were allowed to go into effect, the impact to Louisiana would be “devastating,” said Robert Twilley, LSU’s vice president of research and economic development. 

According to publicly available NIH data, Louisiana universities have active NIH grants worth about $300 million in research funding. About $60 million goes toward “indirect costs,” which are necessary to facilitate the actual research being conducted. Of that $300 million, about $211 million was awarded in fiscal year 2024. See a chart of NIH indirect cost funding by university below. 

The Trump administration has proposed reducing the indirect costs covered through NIH grants from as much as 53% down to 15% for Louisiana universities, meaning they would be scrambling to fill holes totaling tens of millions of dollars or be forced to reduce their research staffs. 

“At LSU alone, the immediate loss amounts to $12 million,” LSU President William Tate said in a statement. “If 60% of the cuts impact personnel, Louisiana could lose hundreds of research-active faculty members, graduate assistantships and research administration jobs.” 

“NIH funding drives that progress. America must lead. Louisiana must compete. Lives depend on it,” Tate continued. 

The National Institutes of Health said the policy change regarding so-called “indirect costs” is intended to align how much the federal government spends on those items with how much private organizations allocate. Twilley said indirect costs pay for things such as infrastructure, environmental safety, waste disposal, libraries and graduate student support. 

Twilley said part of what the public doesn’t understand about indirect costs is that they also cover administration the federal government asks universities to handle when granting funds for research. 

“If we don’t get those indirect costs, then how can we perform the research to be compliant with the federal regulations that they’re requiring of us?” Twilley said in an interview. 

He suggested that if the concern is that money the federal government pays for indirect costs is being wasted, LSU could provide more information on the spending on each grant as a way to ensure more accountability. 

Tulane University receives the most NIH funding out of any Louisiana institution, including a total of $133 million in fiscal year 2024. Tulane, LSU and the University of Louisiana Lafayette are the state’s three R1 universities, meaning they have very high levels of research activity. 

LSU also has medical schools in Shreveport and New Orleans that conduct NIH-funded research, as well as the Pennington Biomedical Research Center in Baton Rouge, which has a complete research focus and does not enroll students. 

“In light of this policy change and its potential impact, we are contacting our Congressional leaders, who have long supported the biomedical research conducted by Tulane and our fellow universities throughout the state,” Tulane President Michael Fitts wrote in an email to faculty earlier this week “We are underscoring to our elected officials the importance of research in saving and improving lives, in preventing and curing disease and in creating jobs and opportunities for all Louisianians.” 

Republican U.S. Sen Bill Cassidy, a medical doctor who previously taught at LSU Health Sciences Center New Orleans, told STAT News Louisiana would suffer from the NIH funding cuts. 

A spokesman for U.S. Rep. Julia Letlow, R-Start, whose district encompasses LSU, did not respond to a request for comment. 

The research universities conduct has an economic impact as well as an academic one. Federal research grants directly support hundreds of graduate assistants and other employees at universities. Tate estimates the economic impact of NIH funding to LSU is around $550 million. Fitts noted that Tulane’s economic impact to Louisiana is $5.2 billion. 

If the NIH cuts were allowed to go into effect, Twilley predicts other federal agencies would follow, leading to even further reductions in higher education. 

The proposed NIH cuts are not the only way Trump’s proposals could impact Louisiana universities. A $22 million project involving the LSU AgCenter has been paused while the administration reviews spending at the U.S. Agency for International Development (USAID). 

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