The Massachusetts Institute of Technology has joined a lawsuit challenging the federal government’s latest attempt to cut research funding for overhead expenses, known as indirect costs.
Eleven other research institutions, including Brown University, and three higher education associations brought the suit.
Filed Monday, the suit comes less than a week after the U.S. Department of Defense issued a new 15% cap on indirect costs for federally funded research. These expenses can include staffing, equipment and laboratory facilities that university leaders say makes their research possible.
U.S. Secretary of Defense Pete Hegseth said in a memo the move would save roughly $900 million a year.
University leaders say in the complaint the cuts are illegal and will weaken national security. They seek a temporary restraining order against the agency.
“The amount and scope of future research by universities will decline precipitously,” they said in Monday’s complaint. “Vital scientific work will come to a halt, and the pace of scientific discoveries will slow.”
The Pentagon’s reimbursement rate for indirect costs are typically negotiated with each university and tend to fall between 50% and 65%, according to the complaint. At Brown, for instance, that rate is 60%.
Under the new directive, universities must renegotiate their indirect expenses or the DOD will terminate existing grants and reissue them under the revised guidelines. Overhead expenses will be capped at 15% or lower for new grants.
A federal court halted similar proposals by the National Institutes of Health and the Department of Energy. The National Science Foundation paused a cap on indirect costs after a consent agreement.
MIT has hundreds of active grants and cooperative agreements with thePentagon and received $107 million from the department in 2024, according to court filings. Roughly a quarter of that funding went to overhead expenses. The lawsuit alleges that MIT leaders estimate the school would lose roughly $21 million each year under the new caps.
“MIT drives U.S. national security through its cutting-edge research, defense innovation, and substantial contributions to military leadership,” a spokesperson for the university said in an email.
MIT’s Lincoln Laboratory, which receives funding from the DOD, declined to comment.
Brown, meanwhile, could see a $3 million loss this year, according to court filings.
The Association of American Universities, the American Council on Education and the Association of Public and Land Grant Universities also joined the suit.
Boston University backed the lawsuit as a member of the AAU. The school received $24 million of funding from the DOD in 2024. Research supported by the department includes a study that seeks to improve shock absorption for U.S. Army helmets. Under the new cap, BU leaders say funding will shrink by over $5.1 million, according to a press release.
Georgetown Law Professor David Super is not involved in the lawsuit, but said the move to slash indirect costs is not an isolated one by this administration.
“This is part of a general war against science in which the universities are very much collateral damage,” he said.
“[The government] has very clear regulations that don’t allow them to do what they did, and courts will simply enforce those regulations,” Super added. “The deeper question is whether the government could go through the process to change the regulations and therefore change the outcome.”
