Indirect costs of federally supported research

Indirect costs of federally supported research have increased steadily and dramatically since the current indirect cost policy became effective in 1966. The amount of research supported by any given level of federal funding has thus been markedly reduced, and this has become a critical factor limiting research support in the United States. The current policy has had multiple adverse effects that threaten the health of both the federal research program and the universities in which most of the research is conducted. This article examines the background and nature of the current policy, describes its consequences, and proposes simplifying modifications.