DOE Implements 15% Indirect Cost Cap on Higher Education Grants

On April 11, 2025, the U.S. Department of Energy (DOE) issued a policy update (Policy Flash 2025-22) that standardizes the indirect cost recovery rate for all grants to Institutions of Higher Education (IHEs), including the University of Maine System, to 15%. This replaces the long-standing practice of accepting institutionally negotiated rates, which often exceeded this threshold. Indirect costs (also known as Facilities and Administrative or F&A costs) include essential expenses such as building depreciation, utilities, administration, and compliance functions critical to supporting research.

The new policy will apply to all future DOE awards to IHEs and may impact the funding available for administrative and infrastructure support associated with federally sponsored research. The DOE has also indicated that it will terminate existing grants that do not comply with this new policy, with affected recipients to receive specific notices and guidance.

The University of Maine is currently monitoring this change and how it may be implemented against current and future awards. Additional guidance will be provided as more information becomes available from the Department of Energy.

For details, visit the official DOE Policy Flashes page.