A new report from watchdog group Open the Books reveals that U.S. universities are allocating up to 70% of federal science grants to administrative overhead, including DEI programs. This practice has inflated taxpayer costs and created incentives for low-quality research. The Trump administration's push to cap these rates at 15% faces legal challenges from university groups.
The federal government provides research grants to universities primarily for scientific advancements, yet a recent Open the Books report highlights significant diversions to non-research expenses. For every dollar spent on science, up to 70 additional cents goes to administrators, according to the study, which examined overhead rates ranging from 50% to 70% added atop direct grant amounts.
These rates, described as a 'black box' with no public accounting, have ballooned costs and fostered a 'college industrial complex,' the report states. In 2023, universities received $60 billion in federal research grants, with $22 billion directed to overhead. Reducing the rate to 15% could free up $14 billion for actual research or taxpayer savings.
Specific examples underscore the issue. The University of Michigan-Ann Arbor, with a 55-56% overhead rate, obtained $9.4 billion in funding from 2013 to 2023, diverting up to $2.3 billion to overhead. During this period, administrative staff grew while DEI personnel increased from 27 to 179. A $2.5 million grant for an anti-racism curriculum based on Southern Poverty Law Center materials generated $1,173,910 in overhead alone.
Rutgers University saw overhead as high as 57% on $3.8 billion in grants, leaving about $2.4 billion for direct costs, amid a staff expansion of 10,000—only a quarter of whom were faculty. The University of North Carolina-Chapel Hill, with rates of 52-55% on $7.7 billion over a decade, used portions for initiatives like promoting LGBTQ+ participation in science.
The America COMPETES Reauthorization Act of 2010 mandates 'broader impacts' in grants, often incorporating DEI and outreach, transforming research approaches, the report notes. For instance, a $600,000 chemistry grant included funds for recruiting underrepresented minority high school students to STEM, and a $1.5 million Rutgers robot project supported diversity programs.
The National Science Foundation allocated $7.4 billion for research and development in fiscal 2024, with added bloat from these requirements. A National Association of Scholars report explains the incentives: 'While scientists pursue research funding for discovery, institutions want research grants to generate revenue. Because scientists are employees, and administrations are employers, administrations’ interests will always have the upper hand.'
The Trump administration proposed a 15% cap to curb waste without harming research, but university lawsuits have stalled it. Open the Books criticizes concealed DEI programming under research line-items as a 'secret tax on research and development' and urges universities to disclose overhead data to restore trust.
