It's pretty telling that schools like Penn don't cut their administrators, but instead they cut their admissions.
"Between 1976 and 2018, full-time administrators and other professionals employed by those institutions increased by 164% and 452%, respectively. Meanwhile, the number of full-time faculty employed at colleges and universities in the U.S. increased by only 92%, marginally outpacing student enrollment which grew by 78%.
When we look at individual schools the numbers are just as striking. A recent report I authored found that on average, the top 50 schools have 1 faculty per 11 students whereas the same institutions have 1 non-faculty employee per 4 students. Put another way, there are now 3 times as many administrators and other professionals (not including university hospitals staff), as there are faculty (on a per student basis) at the leading schools in country."
https://www.forbes.com/sites/paulweinstein/2023/08/28/admini...
It's possible that there may be too many administrators at a university, but from my perspective after 20+ years in academia, one clear driver is continually increasing rules, regulations, and compliance, along with fears of audits and lawsuits. I'd even make an analogy to increased malpractice insurance costs for doctors due to increasing number of lawsuits doctors face.
For example, there are more compliance costs around IRBs for human subjects, export controls of potentially sensitive data, companies we can't work with (e.g. in China), contracting with companies we can work with, intellectual property and startups, Title IX, discrimination, Federal funding do's and don'ts, cybersecurity requirements, travel to foreign countries (soon to be implemented), and a lot lot lot lot more. Also, like security, these things only ratchet upward, never down.
In the past, professors used to handle some of these things informally and part-time on top of their teaching and research, but it really has to be professionalized and be done full time because of risks and costs of getting it wrong.
Taking a step back, discussions about "too many admins" also feels not all that different from those threads on HN saying "I could build product XYZ in a weekend, why do they have so many employees?" Sure, but building the product isn't the hard part, it's sales, marketing, customer support, regulatory compliance, HR, data scientists, UX designers, and all the other functions needed to transform it from a product to a business.
Compliance industry has gone from $0 to $90B in twenty years. It does not produce anything real, except lobbying for more compliance needing more compliance services, software and lawyers.
Here is a book about it:
https://www.amazon.com/Compliance-Industrial-Complex-Operati...
I did work for a compliance as a service company 35 years ago. Customs brokers go back much farther than that. I’m very suspicious of the claim this whole industry didn’t exist 20 years ago, which makes me suspicious of the other claims.
I work at a public K-12 in IT. We were definitely doing compliance reporting 20 years ago. Compliance is pretty central to the IEP process created in 1975, but it goes back further than that.
We were cleaning out old cabinets that had been stored for many years. We found aggregated student data reports so old that my grandmother (still alive at 106) would have been among the headcount. 90 years ago we were doing compliance reports. The reports were very simple, but there were no computers to create them. They would have involved just as much time as we spend on today's reports only we have a hundred times the data in them.
As a fellow academic at a major research institution, I agree that the regulatory aspect (IRB, grant money auditing, etc) is a huge financial burden requiring many staff. This is not something that universities can easily reduce without loosening requirements at the Federal level
> one clear driver is continually increasing rules, regulations, and compliance, along with fears of audits and lawsuits
I think this a gap that can be easily and fittingly addressed by explainable AI (XAI) hopefully with much cheaper cost using automation, reasoning and decision making with minimum number of expert staff in the loop for verification and validation.
I've got the feeling that Elon proposed DOGE as a trojan horse for doing this sneakily:
1) Reduced the budget to make govt more efficient so staff number reduction is inevitable
2) Sell and provide XAI based solutions for regulatory compliance, etc (accidentally his AI company name is xAI)
3) Repeat these with many govt's organization, research, academic institutions
4) Profit!
But apparently the US research universities like UPenn did not get the memo and cut the number of graduate research students instead of the admin staff.
I wouldn’t trust an LLM to do anything compliance related. Sounds like a recipe for a lawsuit
> cheaper cost using automation, reasoning and decision making with minimum number of expert staff in the loop for verification and validation.
> But apparently the US research universities like UPenn did not get the memo and cut the number of graduate research students instead of the admin staff.
If you reduce the number of staff, the people who are going to hurt first are the graduate researchers. I run my lab with a whole host of college and department staff who make all of our jobs easier. If you cut them, their jobs are going to fall to professors, and if they have to do more admin work, graduate teaching and research assistants are going to get more shit work, and also there's going to be fewer than them.
For instance we have a whole office that help us get our research funded. These people are "bureaucratic administrative overhead", but they make everyone's job easier by providing a centralized resource for this particular problem. Get rid of them an you can save millions of dollars in salaries, but you're going to lose more than that in lost contracts and professor/student productivity. This would mean students probably would get cut anyway, so they're making the smart move of supporting only the students they can, and not leaving anyone out to dry.
In Dan Simmons' novel "Hyperion," one of the characters describes a government agency that both builds monuments and provides medical care to children. When faced with budget cuts, they reduce the medical care while continuing to build monuments, because monuments are visible evidence of their work while the absence of medical care only shows up in statistics.
The administrators are the school at this point, why would they choose to cut there?
I recently saw a term for this -- "hostage puppy", which I think is an excellent description. I think [1] is the original source for the definition.
Oof the US team I work for is beholden to a foreign HQ that runs the hostage puppy play, great term.
The literal worst thing Penn could do for students at this point is to take more on they aren't sure they will be able to support through their Ph.D. They are protecting and looking our for the students they have by not accepting more.
>It's pretty telling that schools like Penn don't cut their administrators, but instead they cut their admissions.
Ye olde Sowell quote[1] about institutional priorities and budget cuts seems highly appropriate here.
[1] https://www.pennlive.com/opinion/2013/03/thomas_sowell_budge...
If a tech company has to make rapid cuts, it will lay off engineers. This is basically the same situation.
Administrators usually exist for specific reasons. As long as those reasons remain, it's difficult to cut administrators. If there are regulations governing what the university is allowed to do with federal money, the university needs administrators to ensure and report compliance. If students expect that the university will provide accommodation, the university needs enough staff to run a small city and all associated services.
> If there are regulations governing what the university is allowed to do with federal money, the university needs administrators to ensure and report compliance
I have a friend who’s a fairly established scientist in his field. The promised cuts to NIH indirect funding would have exactly the effect you’re describing by requiring them to spend time calculating everything as direct costs for every shared resource precisely enough to survive an audit. Trying to save money there will cost more than it’s worth because most of the shared people, equipment, and resources are paid for by NIH but they’d have to add accounting staff to document which fraction gets billed to which grant at that level of precision.
> If a tech company has to make rapid cuts, it will lay off engineers.
In my experience, they'll try find literally anyone else they can before laying off engineers. Both times I've been a part of it was like 10-20% of laid off employees were engineering. 80-90% recruiting, support, admin, HR, middle management, design, etc, etc. As much as possible leave sales, marketing, engineering functions alone.
> If a tech company has to make rapid cuts, it will lay off engineers. This is basically the same situation.
Eh, maybe. Part of me thinks this is making a spectacle out of having to tighten up the finances.
I’m reminded of when I was in school many years ago at a state university. The state called for a 2% budget cut. Or in other words, going back to what the budget was a year or two prior. The administration went on and on about how there was absolutely no fat to cut and started making loud public statements about how they would “need” to do ridiculous things like cut the number of offered sections for undergrad mathematics courses by 15%, eliminate the music department, etc. They whipped the students into a frenzy and the whole thing culminated with a protest march down to the capitol building, and the state relented.
A nominal 2% budget cut is a 5-6% real cut, assuming average wage growth and inflation. And if that cut meant going back to where the budget was 1-2 years earlier, the university had already faced effective budget cuts over those years.
You’re missing the bigger point, that the cuts they proposed in response were far beyond what would be necessary for such a small budget cut. To say nothing of the fact that they immediately jumped to making highly disruptive cuts (like an entire department) instead of even considering things like cutting admin roles or creature comforts (which had grown like crazy in the years prior) first.
> Meanwhile, the number of full-time faculty employed at colleges and universities in the U.S. increased by only 92%, marginally outpacing student enrollment which grew by 78%.
There’s a separate factor at play here: colleges are increasingly using people who are not full-time tenured professors to teach classes. See, for example: https://acoup.blog/2023/04/28/collections-academic-ranks-exp...
I had one professor at college who remarked on how all of the parking garages on campus used to be parking lots 30 years ago, and are equally full today that they were back then. The student and faculty population hasn't changed over that time, but the growth of administration was explosive.
I don't entirely know how much of this is attributable to each part, but my suggestions are that these administrators are driven by:
1. Increases in student services (ie sports)
2. Laws and regulations, like Title IX
3. Increased bureaucracy around government grants and research funding
4. Huge endowments that need managers
May I suggest a fifth possibility: your core assumption is flawed and your professor hasn’t been paying attention.
Unless your college is failing, it is hard to believe that the student population hasn’t changed significantly over the last 30 years, when the US population has almost grown by 30%.
I attended UCI over 25 years ago. The student population has since more than doubled. Tuition rates, interestingly have also almost doubled.
Not every school wants to grow the size of their student body. And there shouldn't be any reason why they would be forced to.
This was at a college where indeed the student population did not change in size. The same goes for the professors, whose population grew about 5% over that time.
That's a weird thing to say since many small and rather well regarded private schools stay small on purpose.
For example, do you really think Dartmouth is failing?
Yeah, the parent comment here should have been thinking Dartmouth rather than about one of the UCs for their model school. This was Caltech.
Well, as a fellow alum, I can tell you they definitely screwed up the last two points (esp ITAR) within living memory.
Those 4 aren't really adding much overhead.
For instance, I can tell you right now with certainty that at any large university the number of software devs or database admins in the IT department far outpace the number of financial analysts working in foundation/endowment. Pick any large university at random, and I'll wager that without even knowing the spread.
But here's the thing, universities need IT divisions. They also need the other large operations level bureaucracies they typically have put in place. Facilities and plant, university police, housing, etc etc. You can't pull off a large university without these divisions nowadays. So saying, "Oh we can cut them" is very shortsighted.
I worked at a large public university. The University had a large central IT team, but each college had its own independent IT team that managed their own computers, network, printers, and other technology. Each also had their own software dev teams and there was significant overlap an inefficiencies in this model.
Not every university is set up this way, and it’s not necessarily as inefficient as you think, since different colleges have different needs.
Yeah it’s easy to think centralizing IT will deliver a lot of efficiencies, but you pay the price in reduced agility on the ground.
The best balance I’ve seen involves centralizing a small number of essential services, ideally ones with lots of compliance and security complexity. Manage that well in one place, then let the departments use that infrastructure to meet their unique needs.
When I get in front of a classroom and my tech isn't working, I call a number and they dispatch campus IT immediately to my location to fix it within 5 minutes. This kind of rapid response and support isn't possible for a department to fund, especially if it's a department like History.
Face it - students have higher expectations now, professors also have higher expectations. This requires administrative staff to run. Back in the day school budgets were lower, but even when I went to college in 2005 they didn't have campus-wide wifi in every classroom. We had one professor who taught with powerpoint. Today, every student has a laptop in class.
Maintaining a modern campus takes a big IT department and centralizing it is the least wasteful way to do things.
I think its likely students having more money and therefore a car plus there being more students overall. Tons of colleges now most students have a car and parking pass even if they live 3 blocks off campus.
Nobody would fire themselves or their close friends/colleagues. But they would also want less work and delegate responsibilities. So if left alone, admins would have all the incentive to hire more reports and try to cut cost elsewhere instead of themselves, which lead to reduced revenue and bloated institutions.
It is a vicious feedback loop.
Who do you think advises students getting into classes, who do you think reviews applications or works with companies to get students jobs. There is administrative over head because these activities are not core competencies of researchers.
People act like a reseach faculty member should be conducting cutting edge research while writing findings applying from Grant's advising students on course course offerings and courting employers while also snoozing with alumni for donations.
Noone can do it all and thus there are specialist in these fields that usually cost a fraction of what a faculty member costs.
At many schools, advising is a professorial responsibility. Professors have a hard job, but they have a job that is very powerful and prestigious and can be incredibly lucrative (thanks to consulting gigs, patents, etc.).
...subsidized housing, normalized sabbaticals, teaching a course that uses the textbook you yourself wrote...
I’m happy to accept a job where my housing is subsidized. What university is this?
I recall that universities in extremely expensive places like UCLA, Stanford etc subsidize housing and/or provide specially priced housing for staff and faculty. Not to say they are cheap, they are just tolerable given the salaries, which is more than you can say with regular market pricing.
Stanford does have faculty housing: it's made available for the tenured faculty member to rent for life. The school owns the house. The professor builds no equity.
The alternative, given the cost of housing near Stanford and faculty salaries, would be for faculty to live over an hour distant. The university acknowledges the benefit of having faculty live nearby, and also recovers the rent money and keeps the property.
And yet, a lot of Stanford's faculty live right next to campus. It turns out all those startup board seats are lucrative enough that they can actually afford a house in the local area.
None of the above has changed materially over the past few decades.
It’s also revealing the way this move is being marketed by universities. This certainly isn’t the first time HHS has raised concerns about the magnitude of indirect costs. Obama’s HHS also tried to reduce indirect costs: https://archive.ph/2025.01.09-171418/https://www.bostonglobe...
Everything that isn't PIs and grad students is funded out of admin, including all the lab techs.
That isn’t true. Research staff is funded via grants almost exclusively, in computer science. I’m not sure about the sciences, but I would assume they would have a lot of labs that are not set up for education and would be funded mostly by grants.
Well, I'm the parent of a biochemistry lab tech currently selecting Phd project admits, but, I don't know, maybe my kid is making up that he's paid out of admin.
Just because some lab techs are admin doesn’t mean they all are.
Or he could just be honestly wrong.
This is true in physics and geo as well.
Lab techs are often classified as “administrative and professional” employees by university HR but on NIH grants they would be paid for as a direct cost, other personnel (B on the R&R budget form).
I think “core” facilites can be handled a bit differently.
There are certainly NIH mechanisms for supporting them, but I wouldn’t be surprised if some of them are partially supported—-or at least backstopped—-by indirects…
Computer clusters, chem or bio lab gear, staff and techs, …. Some of this isn’t cheap and it’s not safe to let the grad students and p-docs do it. And somebody has to TA all those pre-xx and other mid to advanced course students.
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So why not just use the endowment, why does the tax payer need to fund this? 22.3 Billion isn't enough?
They are using their endowment. They spend around 4-5% of it each year.
Then how did the universities operate before the increases? How come digitalization is not able to reduce the admin numbers. You are the one to justify why you need this additional overhead and not the other way around.
They didn’t used to have to deal with FAR and DFARS compliance, export compliance, cybersecurity, iEdison reporting, and so on. Nevertheless, the administrative component of F&A indirects has been capped at 26% for years. The universities have to fill the budget gap with other funds (and no, not tuition, that is not used for the research enterprise).
In addition to what the other commenter said, most of the public universities doing scientific research used to be far better funded from their states than they are today on a cost-per-student basis. Additional administrative staff that many universities now have is often necessitated by their regulatory complexity as well as the need for generating different sources of funding. These are broad statements that do oversimplify matters, but part of the full story.
Why would digitization reduce the number of university admins? I'm sure there were some clerks and secretaries whose jobs were automated, but the universities also had to add huge IT departments. Plus, everything about a university is more complicated now then in was 50 years ago. In 1970, Harvard had 6000 applicants for 1200 freshman spots. Today it has 54,000 for 1900 spots. I'm sure the percentage that are international is vastly higher now. Probably a higher percentage want to visit campus. Financial aid is a lot more complicated. So just the admissions office is doing much more work.
> In 1970, Harvard had 6000 applicants for 1200 freshman spots. Today it has 54,000 for 1900 spots.
Why not sort descending by SAT score and call it a day? Evaluating things like extracurriculars continues to be classist bullshit and is probably responsible for making acceptance criteria "complicated".
By this metric I would have got into any school I wanted, but that’s just because I put an exceptional amount of effort into preparing for the test. My grades and extracurriculars weren’t top-notch. I did go to an elite-ish school and it was clear that many other students deserved to be there more than me (ie. were able to contribute to society more in various ways), and in my view that difference was legible in the admissions process.
Alternatively, why have they not expanded the number of available seats with the more than adequate resources available?
Because SAT scores, alone, tell you nothing about a candidate outside of their ability to completely that test.
> Then how did the universities operate before the increases?
Easily. Every additional rule and regulation has a compliance cost, we've added far too many rules and regulations.
The EO in question literally just reduces the amount that can be spent on overhead. Maybe they should try reducing overhead?
"Overhead" here is things like physical plant and shared resources.
because most of that overhead isn't removable. all of your chemistry/biology/physics research has labs and lab managers as overhead. that is intrinsically expensive.
Every medieval fantasy movie you ever saw, who were the extras? The people in the castle stay because there's only ever a few positions in the castle. By definition there can only be a few, otherwise you are not a castle person.
I don't know if this equilibrium is natural or not since it's been the paradigm for centuries across a lot of life. I'm describing deep entitlement, the pure raw form of it.
> telling that schools like Penn don't cut their administrators, but instead they cut their admissions
Administrators are typically paid out of tuition. Penn is cutting uses in line with sources.
I get that, but a research university's prestige comes from the recognition for the research they do. Accepting fewer grad students means less research will be done and fewer papers will be published.
They could presumably cut admin staff to some extent, and pay grad students out of the tuition funds freed up. But why would we expect the bosses to fire their friends?
I am assuming some grant overheads also go to admin.
But why don’t they? Does anyone know what all these administrators do?
I’ve heard the theory that more regulation leads to more admin needs but I don’t think higher education has been increasingly regulated for decades.
“Students” might also be the wrong denominator for research-intensive places.
Penn has an army of postdocs and research staff too. Even though they aren’t paid out of indirects, they do need to get paid, have places to park, get safety training, etc, all of which do need admins.
The common argument is that universities offer vastly more services to their students then in the past. Career centers, for example, are relatively new trend. This is in part because students also 'shop' for universities with the best perks - not necessarily the best faculty. The most egregious examples include Michelin star chefs, lazy Rivers, and very fancy scoreboards in their very fancy stadiums. Less egregious examples include better campus security and health support staff. As much as it's convenient to point to administrators as a problem, part of the problem is also the ongoing arms race to attract applicants and students' expectations.
A Unitarian system might be better, faculty run classes maybe without even TAs, your grade is however you do on your final, Spartan campuses without student amenities. The kids would be more depended on themselves to sink or flourish, but it’s almost like that anyways.
But if I had to choose for my own kid and had the money to afford it, I would still go with the full campus experience, although a Unitarian experience would probably be better for access overall.
The unitarian model you mentioned is the norm in Germany and France (and even the UK to a certain extent - a CSU will have better student amenities than Oxbridge tbh).
There are also more federal regulations that universities need to comply with and that drives up the number of administrators.
I think part of the problem is that universities have lots of people who do one job and that job is not everyday. For instance, where I'm at we have two people in charge of summer enrollment. That seems to be it. They are way way overworked for about two weeks at beginning of the summer. I have no idea what they do the other 50 weeks of the year. I think their boss is happy as long as they deal with summer courses.
“I have no idea what these other people I don’t work with do, so it must be nothing” is a really naive and insulting thing to say. They probably don’t know what you do either, would it be fair to say you do nothing of value?
Just because you don’t know doesn’t mean it’s just a bunch of lazy jerks collecting paychecks for doing nothing. You clearly don’t know anything about the state of higher ed regulation if you think nothing has changed in the last few decades. FERPA, HIPAA, Title IX, a huge IT infrastructure and all the security concerns that go with that, the ADA…
Does anyone know what all these administrators do?
Yes. You don't. But other people do.
I don’t think higher education has been increasingly regulated for decades
Every industry has. Education more than most.
The thing though, is that they actually are unnecessary.
We don't have these guys here in Sweden, and our university education costs less per head than highschool education. The Russians don't have these guys, and they even have the Indepedent University of Moscow, which is basically a bunch of mathematicians that let anybody who passes three of their courses take the rest and get a degree.
This whole thing where both they and we and some other people let anybody who does well enough on the exams in is also very important, because it means that you aren't forced to jump through hoops to get accepted, and this signals something to people-- that university education isn't about hoop jumping or about satisfying political criteria, and this signals something about the attitude of the state to its citizens which is really important at least to me.
Sure, but this is the US we're talking about, and the regulatory environment is of course different in the US than in Sweden or Russia.
You can argue that the US's regulations are dumb and shouldn't exist, but that doesn't change the fact that they do exist, and that universities need to retain staff that can ensure compliance.
I don't know if the huge amount of admin jobs at US universities today is actually necessary, but it's plausible that universities in one country might need more admin staff than universities in another.
>Yes. You don't. But other people do.
This assertion is so much more compelling than a couple of examples would have been
Ok, I’ll bite. My university has a team of experts to help students with academic writing. Another that helps us figure out how best to organize our classes in the online LMS that we use for distance education, and to ensure that we all are following a similar structure so as to not drive our students insane. Another team that helps support grad students on visas with logistics around immigration law and what-not. We have an office that helps with patents and technology transfer. Another team that helps with data repositories and management plans. We have a whole research computing office that runs our hpc team and deals with random IT things that scientists are always thinking up. Another that runs our IRB and helps us with that whole process. Another that helps us handle data use agreements so we can share data between institutions while staying compliant with relevant laws and what-not. We have an office that deals with contracts and legal agreements so I don’t have to figure out whether a certain clause in a funding agreement makes sense or not. And we have a whole team that helps me with budgets and financial analysis of my grants and research projects to make sure that my staff don’t suddenly find themselves unemployed in the middle of a grant year because I overspent or didn’t understand that certain kinds of expenses weren’t allowed. This is just off the top of my head and includes who I’ve worked with in the last month or two; I didn’t even get into the animal techs, the facilities folks, etc etc.
These are all people who are at extreme risk of losing their jobs in the next weeks and months because of the chaos happening with NIH funding, and I can say with certainty that I as a scientist and an educator am far more effective because I have these professionals working with me. This is what our indirects cover and it is absolutely crucial.
Admin Support for distance education and foreign students would scale with growth of the number of students. And somehow admin growth rate is double the growth rate of student body.
The rest of your examples explain why: regulation and maybe some unnecessary activities? I do not know who you are but seriously: do you need “a whole team” for your budget needs? How big is your budget? In my previous financial analyst role I (i.e one person) supported the accounting and financial needs for about 30 people (5 different teams, total spend including salaries, outside contracts and travel about $15 million/year). All that done in Excel and with plenty of time to spare. My wife is a part time accountant and she supports about 10 consultants with all their accounting needs: payroll, sending and tracking invoices, taxes (federal + state+city), cash reconciliation, etc…
The teams I mentioned all support dozens of investigators and their associated labs, they are shared resources. That’s part of the point of centralizing overhead costs at the university level via an indirect cost mechanism- if every lab had to do all of that we’d be wasting tons of money and time, but by centralizing it we get economies of scale. Tragically, my own lab’s budget is nowhere near the level that I could support enough financial help on my own… ;-)
And yes, many of the examples I listed are there for regulatory reasons, and that’s a good thing. We have laws around IRBs for good reasons, and it’s very important to have professional support in making sure we are doing things the right way in that regard. Data use agreements are important- when subjects share their personal data with me so I can study it, they do so with the understanding that it will be handled properly and part of how we do that is via data use agreements, and we need professionals to help with that because I certainly didn’t learn enough about contract law in grad school to do a good job with it on my own.
There is obviously a conversation to be had about whether a particular regulation is appropriate or whether there’s too much of this or that red tape, and I think every scientist would be able to tell stories of administrative annoyance. But it’s absurd to argue that the solution is to burn it all down indiscriminately, which is what we’re seeing.
There are thousands of different jobs they could have. You can’t think of any work that might happen at a university?
Universities have more administrators and “other professionals” because they provide more services. There was only a very small IT department in the 70s. Student support services were minimal. This is not a good statistic without more context.
Um, I'm not a fan of bloated university employment structures, but 1976 and 2018? Respectfully, you're comparing apples and oranges.
On the campuses of today's major universities there are entire support divisions. Housing, Facilities and Plant, Foundation, and on and on. And all that is before we even get to the big new divisions to come online on campuses since 1976. ie - University Police and IT divisions. These divisions collectively employ thousands of people at a typical university. In fact, at most universities, the ratio of employees in the bureaucracies to academic staff is roughly between 15:1 and 20:1.
If we want to cut that appreciably, you have to take a hatchet to the biggest divisions. (For most universities that will be IT.) Which is exactly what some universities have done. For example, the University of Wisconsin got that ratio down to roughly 8:1 at one point. But there were still a whole lot of database admins over at UW DoIT.
Point being, when people say "administrators", they're talking about the flood of IT guys, facilities planners, and project managers hired long after 1976. Most universities are far more lean on deans than they are on software developers or database admins for instance. So it's not at all clear how to get rid of an appreciable number of these people and still have a functioning UCLA just as an example.
And here's the bad news, I've only mentioned a few of the operations level bureaucracies required to pull off something like the University of Texas, or University of Michigan, or University of Wisconsin. Or even Penn for that matter. It's not as easy a problem to solve as people make it out to be.
Wait, why is University police so historically recent?
Cleary Act
Not really.
At the biggest universities, police pre-date that law.
The reason is obvious when you consider how large many universities have become. If you throw 50000 20 year olds into a 3 square mile area, there's likely to be a lot of crime that happens. Sexual assaults, narcotics, and thefts mostly. There are, of course, more serious crimes that happen as well. In all that chaos, these universities have an obligation to keep order.
Yeah it's not partisan to wonder if it's a political move to maximize annoyance to point blame back at the current administration.
Similar to teachers having to buy their own pencils etc but school administrators and their retirement funds never seemed to be cut.
The White House is trying to require at least 85% of grant money go to research and not administration. It’s such an obviously common sense improvement and the first serious proposal to roll back this administrative bloat that I’ve ever seen.
No they’re cutting payments for indirect costs down to 15%. They’re not requiring money be spent on research instead of admin, they’re just giving out less money.
This is not and was never supposed to increase American research productivity. Just the opposite actually, they want less science done in America, and as a bonus they “save” about $5 billion, that is, approximately one half the cost of a single aircraft carrier
This sounds great in theory, until you start looking at the actual things that overhead covers. Things like the cost of my office space, my lab space, electricity, heating, building maintenance, telephone, computer network, IT and tech support, the photocopier machine we share, my admin assistant that handles travel and purchases, the admins in my department that handle grant budgets and compliance (which quite frankly I don't want to personally deal with), and more.
I mentioned Chesterton's Fence in another post here, about really understanding a problem and why things are done in a certain way, before tearing everything down. I'd really encourage people to try to understand things better before jumping to conclusions, it's not all that different from the engineer's disease that often gets mentioned on HN.
I empathize, but you're wasting your time. Half of the accounts in this thread and the similar recent threads are bots, not Americans, or so deeply entrenched in their blind partisanship that they abdicated thinking for themselves long ago.
I wonder, am I a bot, or an American...
Technically they want to limit indirect costs to 15%. This currently ranges from 50%-100%. Indirect costs have two components, facilities and administration.
Facilites are the cost of buildings, electricity, janitorial service, etc. Think of this as things that might be included in the rent if you were renting a place to do the research.
Administration costs are mostly salaries for people, administrative and clerical staff. Not the people directly doing the research (that's a direct cost), but the people in charge of safety/compliance/legal, etc.
Administrative costs have been capped at 25% for a few decades. Facilities costs are not capped.
Hosting a large number of top universities which conduct research attracts the best and brightest minds from around the world, many of whom stay in the US after doing their PhD, and is a significant factor in what makes the US the biggest economy in the world.
Even if you subscribe to an America First policy, tearing down university research labs (which is the knock-on effect of cuts at the NIH, NSF, etc.) is one of the worst things you could do.
Want to actually cut gov spending? Look no further than the military budget (which the GOP Congress is proposing to _increase_, not decrease).
(That being said, yes, there is waste at universities. I'm all for some reform, but this is not reform, it's destruction.)
The entire academic industry is in turmoil, the uncertainty on how bad things could get is probably the worst of it as Universities are having to plan for some pretty extreme outcomes even if unlikely.
For those who are questioning the validity of a 59% (or higher for some other institutions) overhead rate, your concerns are worth hearing and a review could be necessary, but oh my please not like this. This was an overnight (likely illegal!) change made with no warning and no consultation.
If the government decided that a cap was necessary it should be phased in to allow for insitutions to adjust the operational budgets gradually rather than this shock therapy that destroys lives and WASTES research money (as labs are potentially unable to staff their ongoing projects). A phased in approach would have nearly the same long-term budget implications.
Are there too many admin staff? Likely? Is this the right way to address that? Absolutely not.
For those who are unfamiliar with how career progress works in Academia, it is so competitive that even a year or two "break" in your career likely means you are forever unable to get a job. If you're on year 12 of an academic career, attempting to get your first job after your second (probably underpaid) postdoc and suddenly there are no jobs, you can't just wait it out. You are probably just done, and out of the market forever as you will lose your connections and have a gap in your CV which in this market is enough to disqualify you.
> For those who are questioning the validity of a 59% (or higher for some other institutions) overhead rate, your concerns are worth hearing and a review could be necessary, but oh my please not like this. This was an overnight (likely illegal!) change made with no warning and no consultation.
Why should the public believe that procedures that produced 59% overhead rates in the first place can be trusted to fix those overhead rates now? Sounds like a demand for an opportunity to derail needed reform by drowning it in red tape.
Also, what would be illegal about the change? Are the overhead rates in a statute somewhere? The grants certainly aren’t individually appropriated by Congress.
> Also, what would be illegal about the change? Are the overhead rates in a statute somewhere? The grants certainly aren’t individually appropriated by Congress.
2024 appropriations (and it showed in many years before then-- Public Law 118-47. Statutes at Large 138 (2024): 677.
SEC. 224. In making Federal financial assistance, the provisions relating to indirect costs in part 75 of title 45, Code of Federal Regulations, including with respect to the approval of deviations from negotiated rates, shall continue to apply to the National Institutes of Health to the same extent and in the same manner as such provisions were applied in the third quarter of fiscal year 2017. None of the funds appropriated in this or prior Acts or otherwise made available to the Department of Health and Human Services or to any department or agency may be used to develop or implement a modified approach to such provisions, or to intentionally or substantially expand the fiscal effect of the approval of such deviations from negotiated rates beyond the proportional effect of such approvals in such quarter.
That says the indirects must be based on the existing regulations. The memo purports to rely on the existing regulations. It relies on 45 CFR §75.414(c)(1), which states:
> The negotiated rates must be accepted by all Federal awarding agencies. An HHS awarding agency may use a rate different from the negotiated rate for a class of Federal awards or a single Federal award only when required by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification as described in paragraph (c)(3) of this section.
Subsection (c)(3), in turn, says:
> (3) The HHS awarding agency must implement, and make publicly available, the policies, procedures and general decision making criteria that their programs will follow to seek and justify deviations from negotiated rates.
Just based on a quick perusal it seems like the administration has a decent argument that the agency head can approve the 15% indirect by fiat as long as he or she comes up with a documented justification.
https://goodscience.substack.com/p/indirect-costs-at-nih This reads that argument in the exact opposite direction:
> So, an HHS division like NIH can use a different rate only for a “class” of grants or a “single” grant, and only with “documented justification.”
> There is nothing that says NIH could, in one fell swoop, overturn literally every negotiated rate agreement for 100% of all grants with all medical and academic institutions in the world, with the only justification being “foundations do it” rather than any costing principle whatsoever from the rest of Part 75 of 45 C.F.R.
Further, this doesn't allow a blanket adjustment to existing awards.
That is an argument in the opposite direction, but it overlooks two things.
1) The “documented justification” must reflect the requirements of subsection (c)(3), but that provision imposes no real substantive requirements. It’s a litigable, but the linked article concludes there must be more justification than the statute seems to require.
Note also that, amusingly, Kisor is still the law of the land and under that decision agencies still get deference in interpreting their own regulations.
2) The article frames the Congressional rider as prohibiting changes to the indirects. But the statute only prohibits changing the regulation, which HHS hasn’t done.
This is a pretty twisted reading; it basically is a reading of the statute that it has no effect or any kind of restraint at all.
We'll see what happens.
The statute just says the agency must use the existing regulations. The regulations were promulgated by the agency to govern its own discretion. The executive reads the regulation to constrain the civil service to a particular process, but allow the negotiated indirects to be overridden by the head of the agency with a documented reason.
You’re assuming that the regulation would constrain the head of the agency but why would that be the case?
Whether or not the head of agency is allowed to a drastic change like this doesn't change the fact that it is stupid. It's going to cost money in the long run.
The purpose of many laws is to require documentation without imposing any new limits on what the government can do.
> Also, what would be illegal about the change?
At the *very* least you should be following the administrative rules act (requiring you to solicit 45 days for comments by effected parties) before making such a dramatic change in policy.
Courts absolutely love striking down EOs (of both Dems and Reps Admins) when they should have been following the administrative rules act.
You can file an APA lawsuit about anything. Nobody really calls APA violations “illegal.” It’s a “show your work” and “don’t be drunk or crazy” procedural law.
DACA repeal was blocked on APA grounds
The fact that courts do strike down admins on violating the APA does, in fact, make it illegal.
The “overhead” isn’t even overhead as most people understand it.
But the real question is why does the general public think 59% is too high? Irs an arbitrary number. Maybe an appropriate level of “overhead” is 1000%.
In reality the people who actually know anything about how this is calculated, across the board and across the political spectrum, do not think this is a major concern at all.
The only people who are complaining about it are the ones who hear the word overhead, have no concept of what it means other than taking a lay persons understanding that all overhead is unnecessary and are coming with the idea that anything above 0% is bad.
Were the people at HHS who tried to reduce indirect costs in 2013 during the Obama administration also not the “people who actually know anything?” https://archive.ph/2025.01.09-171418/https://www.bostonglobe...
I bet the “people who actually know anything” at Boeing would also say their launch costs are as low as they can go and there’s nothing to cut.
It seems like the better comparison from your article would be 1992, but really, having RFK Junior sitting there with a chainsaw is in no way comparable to 2013
This is really it. Generally they gesture vaguely toward a notion of "administrative and bureaucratic overhead", without really understanding how that overhead actually cuts waste and improves research output by removing redundancies. If we were to zero out this administrative overhead, it would mean every professor would end up doing less research and more not-research.
1. Why should the public believe that they can fix it. Perhaps they can't, that's not entirely my point. My point is that if the government firmly believes that a change is necessary there are _simple_ ways of acheiving such a change without causing such chaos, waste, and hardship. Perhaps a phased in approach, or other mechanisms. Overnight shock therapy offers very little economic benefits while having very harsh personal and insitutional cost.
2. What is illegal about the change. The NIH overhead rate is actually negotiated directly between the institution and the NIH, following a process put into law. This is why a federal judge has blocked this order [1]. I'm far from a lawyer, but my read of this is that this is a change that would need to come through congress or a re-negotiation of the rates through the mandated process.
[1]: https://www.aamc.org/news/press-releases/aamc-lawsuit-result...
You seem to be unfamiliar with how indirect rates work.
First some basic math: if a project is budgeted at a direct cost of $500,000, the indirect rate of 60% applies to the $500,000, i.e. $300,000.
The total grant is thus $500K + $300K = $800K. The $300K indirect costs are thus 37.5% of the total. This is an upper limit, as many direct costs such as equipment do not get indirect rates applied to them.
Second, these rates are painstakingly negotiated with the NSF and NIH. Yearly audits to ensure compliance must be passed if funding is to continue.
Third, these indirect cost go towards to items such as electricity, heat, building maintenance, safety training and compliance, chemical disposal, and last by not least laboratory support services such as histology labs, proteomics core, compute infrastructure, and some full time staff scientific staff. Only a relatively small portion goes to administration.
Finally, scientists generally would welcome review and reform of indirect costs to ensure they get the maximize benefit from the indirect rates. However, DOGE is not interested in reform. They are interested in raze and burn destruction.
If DOGE gets its way, it will knock the Unites States off its perch as the world’s technological leader.
You can tell people the truth all day long. They don’t want to hear it. They’re convinced that academia is rotten to the core and none of your facts and figures will dissuade them.
For example I know at my institution every dollar, every piece of effort, is painstakingly tracked and attributed to funding sources. We have extensive internal checks to make sure we aren’t misusing funds. Audits happen at every major milestone. All of that effort is reported. It’s exhausting but the government requires it because we have to be good stewards of the funds we have been granted. No one believes it.
I’m not part of academia but was heavily involved in funding because of my position in student government while still in college.
While I won’t argue there isn’t waste (what endeavor doesn’t have waste?) it’s an incredibly tiny percentage (except in cases where there was actual fraud, which we also discovered and the Feds prosecuted and convicted people for).
The irony is that academia is so afraid of “waste” that I wouldn’t be surprised if colleges spend more money on the auditing and the compliances, etc than the actual waste they prevent.
I’ve had to deal with NIH audits up close. The amount of work devoted to compliance can make one question if the grant money is even worth it in the first place.
A big part of the reason indirect rates evolved is because the administrative burden to track direct costs is immense. How do you split up direct costs on an electric bill? Do you place a meter on each wall outlet and try to assign each amp to a specific job? Or safety training? Divide the safety meeting minutes by ….. ? It’s impossible. Which is why Vannevar Bush pioneered indirect costs. See the history section here:
https://www.cogr.edu/sites/default/files/Droegemeier%20Full%...
A bit stupid on a community like this because many people at least spent 4 years in school.
We must keep trying. It’s frustrating but we can’t give up. Scientific progress depends on us.
> knock the Unites States off its perch as the world’s technological leader.
It's a funny thing. there is a distinct chauvinism to any citizen's nation. Every American is confident and absolutely positive that we are the best in so many categories. By what metrics? And who measures these? What about other nations who claim the top spot as well?
Before I travelled to Europe in 2008 I had some mental image of backwards, technologically inept populace that had old electronics and lagging standards and rickety brittle infrastructure. I mean you watch films and look at pictures and you see the roads and the old buildings and the funky cars and there's just a mix of things that are 500 years old or 1500 years back and thoroughly modern.
when I finally showed up in Spain I was completely disabused because all the electronics and the homes were totally modern and there were big box superstores that looked exactly like Target or safeway.
We went to shopping malls, watched normal first-run films in luxurious theaters that sold beer, and we rode around in cars/trains/boats, and I visited veterinarian and physician and hospital, and the medical treatment was indistinguishable from the American type.
I mean, this is one consumer's anecdata, but you've got to consider that we're ready to believe vague propaganda about #1 America First Outclassing The Solar System, and the fervent patriotism is perhaps not a 100% accurate lens.
Universities are designed to collect and disseminate knowledge worldwide. The top institutions and even the worst ones thrive on international collaboration. Think about how difficult it is to achieve and hold military superiority even. Schools are an effective equalizer, and globalist mindsets are the default.
the US is def not the best in many categories - though I suspect certain pockets of the US (overrepresented on HN) are like SV re: tech/quality of life and academia
many people I know - mostly [science/math/etc. denying] republicans think the US is the best at everything including healthcare (!!!) despite reams of data conclusively proving otherwise
my fingers are crossed that DOGE/Dump does something stupid enough to irritate the populace (and by extension a handful of senators/representatives to grow a mini-spine) enough to stop this destruction
>Also, what would be illegal about the change?
Besides the president screwing with the budget agreed upon by Congress that kicked all this off?
I’m not convinced that the rate, per se, is actually a problem. What is a problem is the structure. If a contract said “you get $1M to do X and your university gets $590k, paid pro rata by time until completion”, fine, and one could quibble about the rates.
Instead, the grant is for $1.59M, and each individual charge to the grant pays an extra 59% to the university, conditionally, depending on the type of charge and the unbelievably messed up rules set by the university in concert with the government. Buying a $4000 laptop? Probably costs your grant balance $6360. Buying a $5000 laptop? Probably costs $5000 becuase it’s “capital equipment” or “major equipment” and is thus exempt. Guess who deliberately wastes their own and this also the university’s and government’s money by deliberately buying unnecessarily expensive stuff? It gets extra fun when the same research group has grants from different sources with different overhead rates: costs are allocated based on whether they are exempt from overhead!
And cost-plus disease is in full effect, too. If the research group doesn’t use all their awarded money because the finish the project early or below estimated cost, the university doesn’t get paid their share of the unspent money. This likely contributes to grantees never wanting to leave money unspent.
Of course, DOGE isn’t trying to fix any of the above.
>For those who are unfamiliar with how career progress works in Academia, it is so competitive that even a year or two "break" in your career likely means you are forever unable to get a job.
Honest question. If the job market is that competitive, why are we guiding people down this path that requires investing their entire young adult life? To me, it seems you've inadvertently made a case for cutting funding.
The big question is how should the government allocate the funding for basic research between career stages to maximize the benefit to the society.
If you focus on training PhDs, which is the American way, you get a steady stream of new people with fresh ideas. But then most PhDs must leave the academia after graduating.
If you focus on postdocs, you get more value from the PhDs you have trained. Most will still have to leave the academia, but it happens in a later career stage.
If you focus on long-term jobs, you have more experienced researchers working on longer-term projects. But then you are stuck with the people you chose before you had a good idea of their ability to contribute.
We aren't really. We are guiding people to get college degrees. However, undergraduate education and professional research are both done by the same institution. Further, that institution likes to have those professional and apprentice professional researchers work as teachers. The result of this is that undergraduates get a lot of exposure to professional Academia, so they naturally have a tendency to develop an interest in that profession. Given how small the profession actually is, even a small tendency here saturates the job market.
At this point, what profession isn't "small"? It feels like jobs are declining across all industries except for the most exploitative ones they can't easily outsource.
> you are forever unable to get a job
In academia*
> it should be phased in to allow
This NEVER works. It just doesn't.
Bureaucracies are self perpetuating, it's just their nature. Each person at the bureaucracy is 100% certain they are essential.
The only way to shrink them is to force them.
The federal workforce, as a percentage of all jobs in the U.S. was 4% in the 50's, decreased steadily to 2% in 2000 and has held roughly steady since then. (The source is https://usafacts.org/articles/how-many-people-work-for-the-f... second figure, and I'm taking total jobs as a proxy for the population that the workforce serves.)
The end of that period of reduction was Clinton's Presidency. Clinton's National Performance Review (NPR) started at the beginning his term in '93. It had goals very similar to the stated goals of this efficiency effort, but it was organized completely differently. He said, "I'll ask every member of our Cabinet to assign their best people to this project, managers, auditors, and frontline workers as well."
GPT4o: The NPR's initial report, released in September 1993, contained 384 recommendations focused on cutting red tape, empowering employees, and enhancing customer service. Implementation of these recommendations involved presidential directives, congressional actions, and agency-specific initiatives. Notably, the NPR led to the passage of the Government Performance and Results Act (GPRA) of 1993, which required federal agencies to develop strategic plans and measure performance outcomes. Additionally, the NPR contributed to a reduction of over 377,000 federal jobs during the 1990s, primarily through buyouts, early retirements, natural attrition and some layoffs (reductions-in-force or RIFs).
Source: https://govinfo.library.unt.edu/npr/library/papers/bkgrd/bri...):
The recommendations that involved changes to law, the GPRA, were passed in both houses of Congress by unanimous voice vote.
I don't think the stated goals of the current efficiency drive are controversial. The problem is the method. I want to understand the basis for people supporting those methods, the "we've got to break some eggs" crowd, when the example of the NPR exists. In my opinion, it didn't cause conflicts between branches of government, didn't disrupt markets, and was wildly successful. It also caused much less disruption in people's lives, because the changes were implemented over several years with much more warning.
I, personally, don't think the real goals of this effort are the stated goals, but that's a different issue.
It worked during Clinton's administration, and didn't involve a wrecking ball. It's possible when people actually commmunicate with each other.
> For those who are questioning the validity of a 59% (or higher for some other institutions) overhead rate, your concerns are worth hearing and a review could be necessary, but oh my please not like this
This comment encapsulates a big part of why people like Trump. They are sick of inaction in the name of careful consideration and nuance.
And I kinda understand it. By analogy, I've see this many times at different companies I've worked at. Whether it's a 20-year scripting engine or a hastily put together build system that barely works but the entire project depends on, whenever someone suggests to replace it you just get reason after reason for why you have to move slowly and consider all the fine details. Months and years pass and the core system never improves because an "old guard" shuts down every attempt to change it. Finally, someone new comes in and calls bullshit and says enough's enough, and rallies a team to rebuild it. After a difficult process, you finally have something that works better than the old system ever could.
Yeah, I understand the story doesn't always end well, but the analogy above helps me understand Trump's appeal.
Elon proved with Twitter that large corporations can survive drastic, chaotic and insane levels of cuts/layoffs (80%+) and still survive. If DOGE waited to do things less drastically, nothing would ever get done. The cuts that are going through are nothing as drastic as what Twitter endured (except USAID) so I guess he is willing to risk short term disruption for long-term spending cuts and that the organization will reorganize and restabilize pretty quickly.
> can survive drastic, chaotic and insane levels of cuts
I get ads on X that are just videos of animals being slowly shot multiple times to death. There's also some for tools to slim jim car locks. None of the mainstream/normal accounts I used to follow (shout out SwiftOnSecurity) are there, and instead it's a hotbed of crypto scams and deranged vitriol. The site is still running, but is a shell of its former self, making so little money that Elon is trying to sue people (and now, abusing US govt payment systems) to force them to pay him for advertising.
I can see how if you think that's a success, that you would think similar actions with regard to the US government are successful. The necessary cuts he's making are not necessary, and I'm guessing you aren't impacted, so, given the general lack of theory of mind towards others, I'm not surprised you think they're ok. The rest of us out there who understand the idea of human suffering are concerned for our fellow citizens facing arbitrary and unnecessary pain as the result of a capricious court eunach's drug influenced decisions before the "restabilization" that will never happen.
Twitter’s valuation has plummeted since Elon’s purchase.
And to the extent Twitter is still limping along it’s because Twitter due to its very nature benefits immensely from the stickiness of social networks.
For example, Facebook is almost completely junk. It hasn’t improved or been relevant in a long time. And yet it survives and makes tons of money simply because people don’t want to rebuild their networks.
There are many other examples where even minor cuts have been devastating. The classic example is of course GE, the ultimate example of cutting a company to the bone, which worked for a decade or so, but set the company up to essentially cease to exist after.
Then you have Boeing, a company in an industry with less competition than probably any other in the world and it’s struggling to make money because of this thinking.
Boeing and GE are inappropriate comparisons. Their cost-cutting maneuvers were primarily driven by moving existing, quality work to overseas contractors. It was simply about saving money without worrying about efficiency or long-term benefit. The overhead of managing contractors spread throughout the entire world is much more difficult than overseeing groups say within the Seattle Washington area. I really don’t see how this compares to reduction of work forces in government divisions. These government positions are not being moved overseas along with the complicated overhead of managing the groups all around the world.
This equivalence between a company that provides one app that, if it were to disappear, would hurt no one, and a government that has thousands of functions, many of which are life-and-death in both the short and long run, is just ridiculous.
Very few government functions are life or death.
Let's take one example. The Epidemic Intelligence Service (EIS) is a two-year post-residency program that trains health professionals in applied epidemiology. These officers are crucial for on-the-ground investigations of disease outbreaks. It's a 2-year program, with 50-60 doctors in each year. All of the first-year doctors in this year's program were fired by DOGE, so far, for a capacity reduction of 50%. Both years are in the 'probationary' civil servant category, so the jobs of the rest of them are still at risk.
I asked ChatGPT 4o for other examples, and it generated a list of 40. You can do that for yourself, if you're interested.
Regardless, the life-and-death ones are being slashed too. They aren't discriminating in these plans.
Except when they are.
FAA, CDC, NNSA, it goes on and on
> and still survive
Twitter hardly ever made money before and after is in the same state now. Its contribution (anything?) to this country is far different than a government institution.
The comparison here isn’t encouraging and makes no sense.
Twitter’s cash flow has doubled: https://www.teslarati.com/elon-musk-x-doubled-ebitda-since-2...
Elons own statements at his meetings indicates otherwise.
The linked article, which is relying on WSJ reporting, says EBITDA increased from $682 million to $1.25 billion.
Elons own description of his business is that they’re only just profitable some quarters.
Let alone that we’re talking about comparing an advertiser based social network to a government institution.
This is an incorrect statement. Twitter’s revenue halved but its expenses were cut as well meaning its EBITDA doubled. The most likely conclusion on cash flow is that it went down actually, probably by a half in line with revenue (since revenue is a sign of flow in).
This is not the stunning retort to criticisms of Elon’s “fire them all” approach that some imagine it to be. It basically says “we cut expenses by 75% and only lost half our business.” Which half of the US government are you willing to lose, and are you sure you’re cutting the right 75% to lose the targeted half? Which half of the subjects that we fund R&D for are you willing to lose?
https://www.bankrate.com/investing/ebitda/ (“Some investors and analysts use EBITDA to assess the operating performance of a business or as a broad measure of its cash flow.”)
Increasing EBITDA by downscaling the business and severely cutting expenses is a common approach when turning around an unprofitable company.
https://altline.sobanco.com/ebitda-vs-cash-flow/ ("EBITDA and cash flow are both important financial metrics, but they serve different purposes and provide different insights into a company’s financial health.")
We can quote secondary sources back at each other all day, but it's somewhat pointless because the truth is what I said already: EBITDA and revenue are merely indicators for cash flow, not synonyms. You used the wrong words dude.
I also noticed you only replied on a pedantic point while leaving the substantive questions on which half of the government and research funding you'd like to see gone (and how these cuts target that half) as an exercise for the reader.
I think it’s common for people to refer to “cash flow” (without referring to OCF or FCF or whatever specifically ) when they mean EBITDA, but I’m happy to be wrong about that. I’m not a financial analyst. But as you acknowledge, EBITDA is an indicator of cash flow. Is there a difference between the two measures that you think is relevant to X? X is increasing how much money they’re making right?
Amazon made almost no profits for many many years others too. They follow a reinvest or expansion strategy and if investors believe it the stock goes up. It is not encouraging that Twitter lost 80% of its value under Musk's leadership and not something pne wants for the US Government which also does not work on a for profit basis. Ofcourse Musk fakes that he doesn't know that and promotes his unsubstantiated wins stories daily.
Amazon offered very obviously valuable and profitable services. I think we're starting to realize ad-based monetization is not how to maintain a billion dollar corporation anymore. I wouldn't have much aspects for Twitter even if Musk never took over. But he sure did accelerate things.
>ad-based monetization is not how to maintain a billion dollar corporation anymore.
Online ad revenue has been growing, 15% per year recently. Huge growth. That includes legacy networks like (decrepit) Facebook, which is seeing double digit growth, and the short form video frontier is growing considerably faster and constantly pushing out new ad/partnership models and is very much a strong growth industry in an of itself.
Ad revenue is more than sufficient to sustain a billion dollar corporation. It can and does sustain trillion dollar corporations, and the industry is currently in a strong growth phase with a lot of obvious green fields for innovation.
You seem to miss the point.
Twitter was an imperfect yet functional website before Elon. Elon fired most of the staff. Twitter then continued to be an imperfect yet functional website.
Hell, I remember ten years of HN saying "WTF does Twitter need so many people for??", and then those same people said "OMG Elon is insane to fire so many people!!".
Many people are more concerned about the messenger than the message. They’ll flip-flop their opinions solely based on who is doing the bidding.
A glaring recent example. If Biden had taken action like Trump has to negotiate with Russia to stop the Ukraine war, would the Democrats be screaming that Biden is a “Putin apologist”?
If Barrack Obama made statements about deporting undocumented immigrants (which he did), Democrats fall largely silent. If Trump makes similar statements, same Democrats scream fascism, racism, and Nazi/white supremacy.
> short term disruption
Great euphemism for “In one month, we’re going to kill tens of millions by withholding food/medical care and permanently destroy institutions that took a century to build”.
I’m going to use that phrase.
This is the most infuriating part of this. Musk acted like a moron and overpaid for twitter. Then cash constrained, he rapidly cut things to save money. Now twitter is completely diminished in its reach, at an all time brand low, and at real risk from competitors.
Meanwhile, the companies Musk built that actually have dominated their space are big idea innovators like Tesla and SpaceX. Musk wasn’t successful because he’s a good penny pincher, he was successful by burning cash on big ideas and talented people.
But somehow we decided its case 1 that we’ll apply to the government.
Case 2 had a lot of safeguards around Musk to keep him isolated from the talented people. But Case 1 made Musk feel better. So we know which one he prefers. Not like he's going to suffer the losses the most.
It seems Twitter is in a death spiral. That is the model to apply to scientific research and academia that has powered Americas dominance for the past 100 years?
Having spoken with people who worked there, Twitter built a system for which the technical its mostly ran without much help. So it’s not surprising that you can still tweet with most of the staff gone.
Elon proved with Twitter that he doesn't know what he is doing. Huge loss, zero lessons. If US ends up being downsized financially and ethically the way Twitter has, that will also provide zero lessons for Musk.
This is false. Twitter is not the US government. And Twitter is certainly not the US scientific establishment which is dispersed broadly across the nation and which has taken decades to build up. Many research universities will shutter their research departments permanently if these overnight changes are implemented. This is especially true in smaller states like Alabama, which is why Republican Katie Britt is sounding the alarm. Moreover, many people will leave the field permanently.
Moreover, scientific R&D is a strange place to slash if cost savings are the goal. Medicare and Medicaid comprise over 50 times the NIH and NSF combined budget of approximately $50B. If we want to save costs, research into diseases like Alzheimer’s Disease is the way to go. Alzheimer’s currently costs the nation $412B per year [1], eight times the NIH annual budget. Therapies which delayed the onset of Alzheimer’s Disease by 20 years would nearly eliminate this cost.
Let’s be clear: DOGE is led by a self described autist who has little idea how government and broader society functions. The damage he will do if left unchecked is vast.
Define "survive". Elon is still a billionaire?
Sure, if we detonate all nukes, I imagine 20% of humanity will survive. "We" won't die out that easily. Me and you are probably dead, though. Statistically speaking.
> Twitter that large corporations can survive drastic, chaotic and insane levels of cuts/layoffs (80%+) and still survive.
US Government is not Twitter, but yeah, I can see some element of it. Now I suddenly remember, the various comments here convinced me that X/Twitter will be dead in just two months. Yet, it's still around. Not that I care to make account there or bother looking at it, but I figure if it kept crashing, it would show up in the news. Maybe everyone moved to bluesky and it just doesn't have any customers?
So you're still just going to attack the most extreme interpretations and dismiss the truth because it's not literally dead?
Digg is still alive. Myspace is still alive. These big brands don't literally die often; someone will want to try and play around with it.
>but I figure if it kept crashing, it would show up in the news. Maybe everyone moved to bluesky and it just doesn't have any customers?
Twitter is technically stable in terms of servers. They did a good job doubling up by 1) minimizing the load needed by making users sign in to see more than a literal permalink (you can't even see comments anymore) while 2) being a bait to get more new accounts to report on engagement. Not that that matters now since Twitter is no longer publicly traded.
It's the everything else around it that caused it to plummet.
Twitter’s cash flow has doubled: https://www.teslarati.com/elon-musk-x-doubled-ebitda-since-2...
> So you're still just going to attack the most extreme interpretations and dismiss the truth because it's not literally dead?
I can attack my own interpretation, that seems fair, doesn't it? You can have your own interpretation, and then attack it, (or not attack it) later.
> Digg is still alive. Myspace is still alive. These big brands don't literally die often
I had no idea! That's cool. I never really used either one that much. I do know yahoo is still around. One difference is I periodically I see links to X/Twitter. I never see people link to digg or myspace. But sounds like you have a different perspective, which is also cool.
> dismiss the truth because it's not literally dead?
Just to be clear, the truth for me is my impression from reading HN about 2022 or so. Namely from comments like these:
> (Nov 18, 2022) I very much doubt that. Twitter must have had some bloat, but there's no way that 80% of the workforce was bloat. I'd be extremely surprised if Twitter(as in, the website/app, not the registered legal entity) still exists and works by the end of this year.
I agreed to them at the time. So not sure how "truth" and "dismissing" applies; it's really just an impression. Am I allowed to dismiss my own impression? Seems odd to object to that...
>I can attack my own interpretation, that seems fair, doesn't it? You can have your own interpretation, and then attack it, (or not attack it) later.
Your comment just gave some vibes that because Twitter didn't literally die 2 years ago (as you and others predicted) that it seems that introspection was completely proven wrong, "Yet, it's still around". I just simply wanted to assert that being nearly dead doesn't exactly inspire confidence, even though the doctor was technically disproven by his statement of "you'll be dead in 6 months".
"Elon Musk’s X is worth nearly 80% less than when he bought it, Fidelity estimates"[0]
[0]: <https://www.cnn.com/2024/10/02/business/elon-musk-twitter-x-...>
I have a PhD from a reputed US university and I agree with the fixed overhead aspect of this.
There is no reason students get a third of the grant money and live in poverty (30k per year) while the university hires a football coach for ten million and builds a new building every year.
This is exactly the way this has to be handled, the universities are intentionally making this look worse than it is for public sympathy.
Again please read my post carefully. There is a valid critique of overhead rates, but simply doing it suddenly in this manner has little added economic benefit in the long run, while ruining lives and creating waste/chaos in the short run.
You can make a strong argument these institutions require reform, but such reform should be done not overnight, and not through such broad strokes.
I disagree.
The kind of reform you are talking about does not work against quasi-government organizations with the GDP of small countries.
It'll be held up in courts for 50 years, and even then it'll be a game of whack a mole.
There's a reason things got so bad.
Translation: it's too slow and you don't care what breaks in the process. You already got yours.
Anyone complaining about slow courts should probably focus on the courts themselves, or the money coming in. Not the act of laws.
Yes, the rule of law is incredibly inconvenient. Why be bound by it, when you can just do anything that you want?
There is a very basis here for invoking “rule of law” where:
1) we’re talking about discretionary grants being made out of taxpayer dollars;
2) congress has delegated authority to make the grants and to the executive, including determining indirects; and
3) the executive action is being used to save money.
It’s also “the rule of law” in some sense when NIMBYs sue to keep a Ronald Mcdonald House from being built in their posh neighborhood, but that doesn’t mean we need to lionize it on that basis, or preemptively surrender to efforts to invoke the law to block reform. The universities can afford expensive lawyers with their 59% indirects, let those lawyers worry about it.
Yes, that's why countries are not just run by courts and judges.
If you want to change the law, the legislature is right there. All it needs to do is pass a bill.
If you can't be arsed to change the law, you have to follow it.
This is generally how civilized people are expected to behave, and a 49.8% mandate does not give you license to do away with the rule of law.
There's no law to change here.
Universities have freedom in how to use grant money. The government had so far not bothered with controlling what they do with the money coming from the government. The situation is a bit like you donating to a charity and they spending it on executive bonuses.
Are you proposing that the government has to sign everything into law before taking any action? Can you think of why that might be a terrible idea?
There isn't. Congress decided the budget. Your goal is to blame your reps and make sure they budget the way you want next time. That's the proper way.
Since when is it required that all the money in a budget be spent? Amounts are budgeted for a division and then it’s up to that division to operate within that budget. It doesn’t mean they have to spend every single dollar in the budget. In fact, it should be a goal to spend less than the money that’s allocated in the budget so that it can be applied to the next year. The idea that all the money has to be spent, regardless is part of the problem.
I think we are talking about different things here.
I am not writing in support of funding cuts.
I am strongly supportive of stopping universities from skimming most of the funding, and the research getting a tiny bit. Student researchers doing the actual work get less than minimum wage.
If you are surprised by the 'less than minimum wage' part, it's a bit of creative accounting by universities counting a 'tuition waiver' as part of your wages.
this isn't true. I don't think you understand how university funding works.
And yet everyone was arguing recently about how amazing Deepseek was because they operated on such a smaller budget and how the restriction of chips into China forced them to find an efficient solution to training an LLM model. Sudden and drastic changes don’t always result in bad outcomes; in fact, they can many times produce outcomes that were never possible without the shock to the system.
Most of the critics of the doge are arguing that the changes are too fast and that the system needs to gradually and systematically through a series of conferences and meetings come to a proposal that might be implemented sometime in the future.
Spurious. Football coaches are not paid by overhead dollars. but mainly by alumni that like football wins.
No, when a major for-profit company outsources research they pay way more than a 50% “markup”. Unless they go to a research university: then they pay much less, and just like the federal government they are getting a fine deal.
Yes, some rich foundations (Gates, Ellison etc) exploit the situation and do not pay full overhead costs: They are essentially mooching on the research institutions and the federal government.
So you don’t think that some of the money that gets sent to athletic directors to build fancy stadiums and pay for multimillion dollar coaches would’ve gone possibly to research facilities if those athletic departments didn’t exist?
Doesn’t the football stuff fund itself through tickets, licensing, etc? It seems hard to believe research overhead grants are going to the football coach.
Money is fungible.
Only if the organization with the money wants to do that. Flip it around. Do you think the sports program at any major university pays for physics research facilities (or any topic outside of sports medicine)?
>Only if the organization with the money wants to do that.
Great, this should be a enough of an argument then for the federal government to decide how grant money is used.
And?
The one thing has nothing to do with the other.
Football funds itself. That's why the coach makes so much money. If research funded itself, researchers would make a lot of money.
Football program spends big because it rakes in huge amounts. In order to keep making all that money though they need a good team which costs money.
All: some of the comments in this thread are about the University of Pittsburgh, not Penn, because there were two Pennsylvanian-university-pauses-admissions-due-to-funding-cuts threads duelling on the front page and we merged the Pittsburgh one hither. Sorry to any Pittsburghers; it was purely because this thread was posted earlier.
* (It was this one: U. of Pittsburgh pauses Ph.D. admissions amid research funding uncertainty - https://news.ycombinator.com/item?id=43145483.)
Vanderbilt apparently iced its entire incoming biochemistry PhD headcount? My kid got a reject, and found out later that everybody else did too.
There are going to be a lot of repercussions in the future given how many potential future scientists won’t get trained.
What's going to happen is another pandemic. Millions will die, and this is what opportunity cost looks like. We recovered from the last one due to mRNA research from NIH grants (NIAID, one of my clients) and DARPA blue sky funding, almost certain to be cut. These people are literally cutting the funding that saved millions of lives from the last pandemic. Full stop. They don't wanna hear about your facts.
Where's the pharma lobby? Pharma is the only industrial science left in the country!
They're weighing the impact on their future workforce pipeline (and probably hoping this this only represents a ~4-8 year hiccup) against whatever other benefits they can get from cozying up with the administration (whacky regulation land).
https://www.science.org/content/blog-post/pharma-ceos-speaki...
And who knows, with the right wacky regulatory scheme enacted, the workforce impact will be mitigated away. Probably also banking on the size and power of the American domestic economy to still allow them to siphon talent from across the western world to help make up some short falls.
I was just talking to my buddy who works in big pharma and internally it sounds like they have zero concerns about the current administration impacting them.
Actually the opposite, apparently Trump rolled back the Medicare drug cost caps so they're expecting profits to go up.
Maybe they can start bringing in folks trained in the EU, Canada and China.
They are currently on their way to Mar a Lago to ask Trump to roll back the drug price negotiation provisions that were instated by the Inflation Reduction Act
https://www.fiercepharma.com/pharma/phrma-prepares-meet-trum...
If they are protected from competition they will end up like the US auto industry in the 1970's. They can try and do generics but Teva, Ranbaxy and Ratiopharm will eat them once patent protection runs out.
Of course, that'll last until Ranbaxy kills off all of their patients.
The US graduates too many PHDs, not too few
It’s better to graduate too many than too few because it helps ensure that the US workforce of scientists and engineers is cost competitive.
Yeah, we gotta make sure that the Pharmaceutical companies have a great source of cheap PhD labor. /s
I wonder how all the PhD’s that spent 10 years of their life and can’t find a job feel about that?
Too many PhDs... in biochemistry...?
do you care to elaborate? what is too many and what are the repercussions of this?
One of the repercussions is that young people get a PhD, then cannot get an appropriate job.
Also, the taxpayers are paying most of the cost of these PhDs.
I’ve heard from colleagues that numerous biostats programs also did this. Zero PhD admits for the 2025 cohorts. If the department has bio in the title there’s a good chance almost all of its operating budget comes/came from NIH.
> A Penn professor, who requested anonymity due to fear of retribution, told the DP that the decision appeared to be “last minute” and came after departments had already informed the University of the students who were selected for graduate programs.
> The professor added that the University “pulled the rug out” from many faculty members, some of whom had already offered acceptances to students they had thought were admitted — only to now face the possibility of having to cut those students from the program.
If students were informed they were accepted, by anyone at the university (even verbally by a professor), then it's time for the university to cover this (regardless of which budgets it was supposed to come out of), even if it has to draw down the endowment.
Unless the university is willing to ruin a bunch of students' lives in brinksmanship, and then deal with the well-deserved lawsuits.
I don’t think the relationship between departments and the central University is what you think it is
Will wronged parties who decide to sue, sue the department, or the university?
They would sue the professors in their individual capacity as well as the university.
I see a lot of comments about Universities being inefficient, bloated with administrators, and that the cap on indirect rates is justified. I agree, but it is not as simple as made out to be.
I've worked at a university, startup, and large company. In terms of efficiency, startup > university > large company. In other words, large companies are less efficient than universities and universities are less efficient that startups.
I agree the grant overhead is ridiculous and that Universities are bloated with administrators. It felt like every 6 months, an administrator would find a previously unnoticed rule that would indicate my office placement violated some rule, and I would have to move. I think I went through three office moves. Ugh. On the other hand, universities provided time and resources for real work to get done
According to Wikipedia, Penn has an endowment of over $22 billion.
Not enough in the piggy bank to cover?
The whole point of an endowment is to support whatever it was created to support in perpetuity. They do that by investing the endowment and using most of the income from those investments to support the endowment's mission, and a small part to grow the endowment over time.
Penn is spending around $1 billion/year from their endowment, which is a fairly reasonably amount for an endowment of $22 billion.
Penn's endowment distributed $1.1 billion last year. Endowments like this are managed to last a long time - indefinitely, even.
Penn itself is older than the United States - they're not going to start blowing through their endowment because of political trends over the last couple months (or next 4 years), even if they legally could.
Endowments can be very restrictive and thus it’s hard to shuffle money around.
What are they for then?
As one simple example, some funds are for endowed chairs, named after donors or companies. For example, in computer science at Carnegie Mellon, we have chairs named for Richard King Mellon, Kavčić-Moura, Thomas and Lydia Moran, and more. (You can see a full list here: https://www.cs.cmu.edu/~scsfacts/endowed.html)
It costs a few million to create an endowed chair, and these funds can only be used to help offset salary costs for that professor (thus helping with the budget for the department) and for research associated with that professor. You can't just use all of the money in these endowed chairs for other things that people in this thread are suggesting, it's not fungible.
You know, folks on HN often re-post links to Chesterton's Fence (https://en.wikipedia.org/wiki/G._K._Chesterton#Chesterton's_...), about trying to understand how things are done and why, before tearing things down and potentially causing more problems. I'd highly suggest the folks in this thread that are exhibiting a lot of anger about academia keep Chesterton's Fence in mind. Yes, academia has problems (as do all human institutions and organizations), but the amount of good academia offers is quite vast in terms of advances in science, arts, education, public discourse, startups, and more.
I once encountered an endowment fund that was restricted for use in a defined scholarship. This was problematic because that scholarship could only be given to students of a specific race. Restricting applicants in this way would be illegal under Canada's charter, so for at least a decade the funds were simply not spent. As far as I know nothing has changed.
Chesterton's Fence is also just an argument for conservatism and never changing anything because there is no end to the argument that you don't really understand how things are done and why. Maybe "Academia" does need a bit of a wakeup call. You're lumping in a whole lot under academia and it's not really clear what portion of "academia" and academia dollars are linked to those outcomes you're talking about.
You're attacking a straw man, though. I see a lot of posts here that aren't even considering why something might be the way it is. We haven't gotten to the point where someone might do the "you don't really understand how things are done and why" goalpost-moving dance, and suggesting that of course that's how it's going to play out is unwarranted.
I mean, the initial post in this thread is just completely ignorant. Expecting a university to blow their endowment on a short-term[0] political issue is just ignorant. They spend maybe 5% of their endowment each year, because that is the safe amount to spend, as they want to be able to pull that 5% out, every year, essentially forever. Two minutes of "research" on university endowments would surface this kind of information.
[0] Four or even eight years is nothing to an institution that is older than the United States itself.
It is a trust fund basically. From what I uderstand, the principal is nearly impossible to use/withdraw and you can only use the interest/returns generated from investing the principle.
Even that portion is also restricted. The purpose must be strictly academic and some part must be paid to the university, some must be reinvested, and then the final pieces can be used at the professor's discretion according to the rules set when the endowment is established.
So generally, you are looking at 1-2% of the total amount that can be spent annually. Still a lot, but for research, tens of millions would still not be enough for something like Penn.
Typically, they're set up so that the income goes to a particular purpose, or so that only the income is used. For instance, a big chunk of Harvard's engineering and CS professorships are funded through a donation from a 19th century inventor of machines to make shoes. His intent was to fund professorships in "practical sciences" in perpetuity, and he had particular terms - he wanted salaries to be competitive for instance. The university can't legally spend down the principal or use the money for some other purpose.
But they can use the interest.
A $20 billion endowment at a 5% ROI is $1 billion per year
The interest is already what they are using. That is what all these scholarships and endowed chairs and so on are paid with.
you only spend the return on the endowment, so that the endowment lasts "forever"
Endowments are investment funds that ideally generate sufficient returns to cover yearly operational expenses while also growing the principal.
They don't cover yearly operational expenses, which is why they want indirect costs from granting agencies. And also why they charge tuition
At some schools the endowment returns are sufficient to cover operational expenses, which is why they can have such generous financial aid policies (effectively “not charging tuition” for those whom it would matter).
Yeah at the Ivies and equivalents the "tuition" is basically a "suggested donation" and the final bill is based on how much the parents have to give. I'm not sure about room and board.
At private schools, stated tuition is basically just a (soft) cost ceiling. The majority of students receive some level of aid, either need or merit based, or both. It's a pretty good system, if you want a mix of rich students, academically gifted students, and disadvantaged students who might succeed given the resources.
The existience of merit-based pricing is the big differentator versus public schools.
Not sure which way you’re saying the differentiator goes, but “merit-based pricing” is NOT what the top schools have. They are entirely need blind. You don’t get financial aid because you’re good at sports, you get it because you were accepted to the school and if you can’t afford to go there then they will make sure that you can attend. In fact that’s why the Ivies don’t offer scholarships - because if you can’t afford to attend, they’ll reduce your tuition until you can.
I’d call it merit-based admissions, if anything.
(Athletes can still get preference in admissions, with each team given a number of slots, but it’s totally separate from financial aid decisions. And this is actually a disadvantage compared to top, non-Ivy schools like Stanford, because a top athlete from a rich family would go to Stanford for free but would have to pay at an Ivy.)
Sometimes donations which are specifically earmarked for something.
Chronic traumatic encephalopathy and tax deductions, as far as I can tell.
this comment is funny and sad all at once
Oh I should try that one.
As the other poster mentioned, endowments / donations often come with conditions attached that significantly restricts how money from them can be used.
Great point. It’s bad enough seeing bloat in costs, administrators, and activist degrees. But it’s downright ridiculous that universities with billions can’t fund themselves using just investment income. If endowments are claimed to be restricted, I want to see the terms transparently, and see them using the funds maximally before coming back to taxpayers.
But also - why is no one asking whether we need so many college educated students. I don’t think it makes sense for every random person to get a degree or a graduate degree. These programs need to be highly selective since the supply is greater than demand, particularly for graduate degrees.
Penn's budget is $4.7 billion (just the university, not including the hospitals). Even with a $22 billion endowment, they can only fund a fraction of that off of investment income.
And what are you even talking about "coming back to the taxpayers"? This isn't like a sports team holding a city hostage to get a new stadium. They apply for competitive grants to do particular research projects, then they do those projects. They aren't asking for a handout, they are being paid to provide a much-needed service (health research).
Penn has a $22B endowment, and pulls around 5% out of that annually. That seems to be a reasonably safe number that will give them a good chance of at worst keeping the endowment's size constant. Sure, they can take out more every year (they'd have to take out more than 4x that to match Penn's current budget), but then their endowment would reduce in value every year and eventually run out. That would not be a good outcome.
What is an "activist degree"? (Is activism bad?)
Usually impractical and heavily politicized stuff like "colonialism studies".
Activism is not necessarily bad, but the current university environment, for some reason, seems to produce activists who are just unbelievably cringe and naïve.
"Colonialism studies" is politicized? In what way? Sounds like a history class to me--but please tell me why it isn't.. I'm not familiar.
> seems to produce activists who are just unbelievably cringe and naïve
I'd be curious to see some examples.
The administrators, athletic coaches, and non-productive tenured professors all cost a lot, and their hands were in the pie before these students' were. By the way, the students in question are for the "activist degrees" you mentioned - they seem to all be in the humanities.
59% indirect research costs for administrative overhead seems high. Could it be that these charges against grants are used to fund students in other subject areas where grants are not available?
It's pretty typical, actually. 50% is about the minimum that major universities take out of a grant you get as a researcher at the university.
It's nominally to fund general facilities, etc. At least at public universities, it does wind up indirectly supporting departments that get less grant money or (more commonly) just general overhead/funds. However, it's not explicitly for that. It's just that universities take at least half of any grant you get. There's a reason large research programs are pushed for at both private and public universities. They do bring in a lot of cash that can go to a lot of things.
This also factors a lot into postdocs vs grad students. In addition to the ~50% that the university takes, you then need to pay your grad student's tuition out of the grant. At some universities, that will be the full, out-of-state/unsupported rate. At others, it will be the minimum in-state rate. Then you also pay a grad student's (meager) salary out of the grant. However, for a post-doc, you only pay their (less meager, but still not great) salary. So you get a lot more bang for your buck out of post-docs than grad students, for better or worse. This has led to ~10 years of post-doc positions being pretty typical post PhD in a lot of fields.
With all that said, I know it sounds "greedy", but universities really do provide a lot that it's reasonable to take large portions of grants for. ~50% has always seemed high to me, but I do feel that the institution and facilities really provide value. E.g. things like "oh, hey, my fancy instrument needs a chilled water supply and the university has that in-place", as well as less tangible things like "large concentration of unique skillsets". I'm not sure it justifies 50% grant overhead, but before folks get out their pitchforks, universities really do provide a lot of value for that percentage of grant money they're taking.
Well that makes it sound worse than I thought. Why should it be any higher than the pro rata allocation of the project’s actual use of university facilities (lab space, equipment, etc)?
Even in the defense industry, a cost-plus contract with a 10% margin is a lot. And it’s a federal crime to include costs in the overhead amount that aren’t traceable to the actual project.
In the defense/other industries, everything is put under the "cost" part. There's just a lot more line items that cover all that stuff.
The overhead simplifies this to a large extent in that the PI only needs to account, as a "direct" expense the cost of his team (salaries, and things not covered by the university such as compensation to human subject volunteers, etc.)
Its essentially a subsidy, and been abused for years.
One clarifying point. Indirect is normally charged on top whatever the PI gets. So they don't "take out" 50% the total. They add 50% to the original grant. So if a researcher gets a $500k grant, 50% indirect would be $250k, and the total allocation is $750k.
That sounds similar to cost plus in the defense sector.
It is different. Cost plus allows the contractors to charge for development and add a profit margin.
The corporate equivalent would be a fixed price contract, which has overhead built in and far exceeds university rates.
First the rate was negotiated on a per institution basis with the government. It’s based around a mountain of oversight and compliance. Ironically all that compliance work contributes to the need for more administration.
Second, modern research needs a lot of people doing non-directly research adjacent stuff. Imagine looking at all the support people on an airbase, and saying why don’t we just cut them and let the pilots fly without all this logistics baggage.
>Could it be that these charges against grants are used to fund students in other subject areas where grants are not available?
No, PhD students from areas where funding is not available are required to teach. The university pays them for the teaching. Considerably less than what they would have had to pay someone who teaches for a living.
High overhead indicates efficiency, not waste.
If you are Bozo University that has no grants, you also have no overhead, because everything you spend is attributable to that first grant. You spend $50 for tiny little flasks of liquid nitrogen. You buy paper at Staples.
If you are UCSF, you have 80% "overhead" because everything is centralized. Your LN2 is delivered by barge. You buy paper from International Paper, net 20, by the cubic meter. You have a central office that washes all the glassware. Your mouse experiments share veterinarians. All of this costs much, much less because of the "overhead".
If I understand you correctly, what you're claiming is:
University 1 gets $100. $10 of it goes to admin, $90 to researcher. Researcher spends $60 on supplies and equipment. This is accounted for as 10% administrative overhead.
University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment. This is accounted for as 60% administrative overhead.
Is this an accurate characterization of your claim?
> University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment.
This is not how it works; this would be 150% overhead. ($60 / $40).
Basically, if something is a shared utility (common lab maintenance, supplies that can't be metered and charged to specific projects, libraries on campus, etc.) then it's overhead.
Also included in overhead is administrative & HR expenses... and things like institutional review boards, audit and documentation and legal services needed to show compliance with grant conditions.
The reasons for high overhead are threefold:
1. Self-serving administrative bloat at universities and labs. We all agree this is bad.
2. Shared services in complex research institutions (IRBs, equipment maintenance, supplies, facilities). This is good overhead. We want more of this stuff, though we want it to be efficiently spent, too.
3. Excessive requirements and conditions on grants that require a lot of bodies to look at them. This is bad, too, but doesn't get fixed by just lopping down the overhead number.
Unfortunately, if you just take overhead allowance away suddenly, I think it's just #2 which suffers, along with a general decrease in research. Getting rid of #1 and #3 is a more nuanced process requiring us to remove the incentives for administration growth on both the federal and university side.
I am trying to follow this...
if a grant is the same $1M and Bozo University gets to spend all million on the actual research at hand, but UCSF only gets 200K, how is UCSF more efficient?
Wouldn't the LN2 be traceable to the project either way as direct non-overhead cost, but UCSF efficiency makes that cost lower, achieving the same overhead ratio but either a lower grant cost or more researcher stipend?
Plenty of actual research costs count as overhead to avoid the need to hire an army of accountants to allocate every single bit of spend.
For example, the electricity costs of the lab in which the research is run would typically be paid for by the university and would be considered overhead. It's not "administrative bloat". Most of the particularly gross administrative bloat is on the undergraduate side of things where higher tuition costs have paid for more "activities".
Well how do you know that if you aren’t accounting for it?
F&A rates (facilities and administration, “indirects”) are subject to negotiation every 4 (IIRC) years, where those costs are accounted for (perhaps not well enough, but that is a separate point). The administrative component of F&A been capped at 26% for years and R1 universities are maxed out, so the negotiations are over the facilities component.
Note that the institution I used as an example doesn't even have undergrads. It is not using NIH grants to cross-subsidize a college. Medical research is the only thing they do. And they are the #2 recipient of grants, after Johns Hopkins.
Caltech has undergrads.
59% is borderline criminal. Perhaps 15% is too low. But 59% is absurd and unacceptable.
The Salk Institute's overhead rate, IIRC, is 90%. Yet, they keep getting funds, so they're doing something right.
Fraudulent orgs also keep getting funds. That don’t make it right.
So, what's the fraud? I'm a bit tired of that word as of late as some kind of catch-all for "I don't understand how this works and I don't like it".
I’m not accusing any particular organization of fraud. I am rejecting the notion that just because one institution historically receives funds that those funds were put to good use.
I understand how grants and overhead rates work. It’s an embarrassment.
"you're not literally saying fraud, but you're also not NOT saying it's fraud"
Serious accusations need serious evidence. I'm not a fan of this sowing of doubt without a solid basis to back it up. That's very much the DOGE modus operandi, and it's a lazy and dangerous form of argumentation. I'll call it out wherever I can.
You're just saying "thing bad" and expecting agreement without putting any legwork in. The onus is on the accuser, not the accused.
> The Salk Institute's overhead rate, IIRC, is 90%. Yet, they keep getting funds, so they're doing something right.
I do not agree with this statement. Take from that what you will.
> The onus is on the accuser, not the accused.
In criminal law I agree. When it comes to budgeting I do not. The onus is on every program to prove every year that they’re worth funding. I don’t accept the notion that just because something was funded in the past that it was wise then and that it’s wise to continue to fund.
So when someone says “this org has a 90% indirect cost rate and keeps getting funded” I do not think “they must be doing something right”. I instead think “wow they better have a frickin spectacular argument as to how that is possibly justifiable, and I’d bet $3.50 they don’t”.
It’s worth clarifying that the 59% overhead rate doesnt mean 59% of the funds go to overhead. If you have a $1m grant, you add on $590k for overhead. Then the total grant is $1.59m, so actually 37% of the total funds are for overhead.
FYI, Overhead don't include everything. Even in remaining 49% there are many overheads :)
It’s worth noting that Pitt’s indirect rates are normal for universities and this is how the system functions.
Its "normal" because its generally accepted, not because it makes any sense.
I was part of a research lab on grants like that. We had close to $1m in total funding, on top of that indirect was like 50% (so $500k/year) We maybe had 4000 sq. foot of lab space in an old building that wasn't maintained well. We had one bathroom for each gender on the floor for the research arm of two whole medical departments. Two admins for the whole research department of 7-8 labs totallying maybe 60-70 staff.
I ran the numbers and the lab space would have maybe cost $100k/year tops (probably more like $80k, depending on quality) if we were rent out equivalent industrial office space. On top of that you have electrical, heating, telecom, at most $10k. Support services such as HR, cleaning, IT support (of which we didn't use a whole lot) could have been contracted out, at most around $20k. So there was about $350k which I figured was mostly just a subsidy and went to "administration". Not that I was philosophically opposed to it, except maybe the admin.
You're actually still misunderstanding overhead a little.
Overhead isn't applied uniformly. For example, tuition for Ph.D. students isn't charged overhead, nor is (usually) equipment. So on $1m of funding, if you've got 4 Ph.D. students, that may be something like $200k/year of tuition that isn't subject to overhead. Add in another $100k of equipment and suddenly that 50% indirect cost rate is actually more like 35%, so you end up doing $1m of "work" on $1.35m of budget.
Departments often negotiate something called "overhead return", which is a way of returning a small amount of money to the individual departments -- some of this does things like supporting Ph.D. students if their advisor runs out of funds, or helping research faculty bridge short funding gaps. These things are reasonable and help the institution remain coherent through the uncertainty of grant-driven existence.
There's waste everywhere, but it's not quite as bad as it might seem without a deeper understanding of the university research funding model.
It's also worth noting that this overhead percentage is misleading. A lot of other contexts would view $1M of work on $1.35M of budget as 25% overhead, not 35%.
The parts you list result in wasted research money. The system you complain about results in more R&D getting out into the world.
The money you complain about goes to run an org that has connections, does advertising, provides stable employment when grants fluctuate, has hiring and HR and payroll and a zillion other services, all making those doing the research more able to do research, and provides more channels to move results into production.
So it makes sense. You just haven’t thought through or had to perform all the pieces, so to you it doesn’t make sense.
Ah yes, we need a fudge factor to subsidize a bunch of unquantifiable woo like “advertising” and “stable employment”.
I’m sick and tired of elites telling me basic business operations of profit and loss, value for money, quantifiable results are beyond my peasant brain to understand.
> Ah yes, we need a fudge factor to subsidize a bunch of unquantifiable woo like “advertising” and “stable employment”.
Try convincing the AC guys to work for parts cost + a skilled worker wage * number of hours worked, see how well that goes over. They'll laugh you out of the room, and you'll be left sitting on your ass without air.
The entire world charges overhead for work done. Most of it way more than 25% of the sticker price.
>Try convincing the AC guys to work for parts cost + a skilled worker wage * number of hours worked, see how well that goes over. They'll laugh you out of the room, and you'll be left sitting on your ass without air.
Huh? Thats exactly what they do. Parts + labor
And at what markup do they bill you, compared to what they paid their supplier, and to what they pay the guy who drives out to install it?
(Hint: Nearly half of what you pay on the bill is their overhead.)
It’s wonderful that I can compare proposals and know the bill. To pretend NIH grants are anything remotely like normal private sector contractors is absurd and shamefully deceitful
> It’s wonderful that I can compare proposals and know the bill
Does the NIH not, like, compare proposals before deciding on whether to pay for them?
> To pretend NIH grants are anything remotely like normal private sector contractors
Please enlighten us to the differences that are at all pertinent to this question. Specifics, not vague scare quotes.
Typically overhead is only charged on a portion of expenses. In our case, anything over $5k or that is part of a "constructed equipment" over $5k (these two categories are the large majorities of expenses in our lab, as most things we buy are components of detectors we build) are overhead free. Supplies/laptops/travel/tools/business meals/inexpensive equipment do incur overhead, but the effective overhead rate is much less than the nominal one.
They are high relative to private industry. They're supporting all those administrators that colleges have accumulated.
It's significant that U. Pitt. chose to stop admitting students rather than starting to lay off administrators.
If my tax dollars are supporting research, I'd rather they go to universities even if that means some bloat in the form of more people hired than otherwise, rather than corporate shareholders.
Administrative bloat is a concern, but these indirect costs include things like equipment, too.
If you build a good lab which has versatile equipment to address many use-cases, the indirect costs will be high.
BS they include equipment. Everything we needed was either bought by us on grant money, or was part of some collaborative grant for the whole department. E.g. and imaging lab that maybe had a SEM or two-photon, etc.
What you bought on one grant, and then is lab equipment being maintained and serviced afterwards is now "facilities" costs.
The university definitely doesn't "service" it at all. If it breaks, you call up the company and hope its under warranty, or you pay someone to fix it, again off the grant funds.
I guess it's fairies performing all those calibrations and restocking all those consumables that can't easily be charged to individual projects.
They did jack crap. Anything more complicated than a light-bulb or a toilet that broke, the lab handled it internally somehow (either getting the company to fix it or doing it ourselves).
There were a few department-wide resources. Again, ultimately funded off someone (or a bunch of people's) grants
Not really, and it's not really how things work either.
Private industry is charging/billing cost + margin for profit.
University is saying X is allocated for research, Y is allocated to keep the lights running for the facility and pay for students. The students are generally funded by research, not the University. No research money, no money for students.
I guess you need to compare universities to research institutes like Howard Hughes (HHMI). Unfortunately only academic institutions are eligible for grants from NIH/NSF, so they don't break down their costs like that.
This is incorrect: while some NIH and NSF grants require an academic institution as the prime or sole awardee there are many that are open to private organizations and others that are mandated to be specific to small businesses (SBIR).
Research funding awarded to universities and to performers internal to NASA (back when there was a reasonable amount of that) had overhead rates that were similar to the NIH rates. When I worked at Xerox PARC, we would perform research for other parts of the company and charged overhead too, although the rate was a little lower (around 40%). Institutional overhead has been a regular feature of how research has been organized and funded for 60 years. Change is fine, but most of the costs are legitimate, and it takes time for the rest of the system to adjust to changes in one part of it. Doing it abruptly is damaging the system and will negatively impact the careers of many students and young researchers.
Most non-university non-industry non-government research institutes in the US (eg. Salk Institute, J. Craig Venter Institute, Sanford Burnham Prebys) rely on their researchers applying and getting grants from the NIH and NSF just as university scientists do. And their overhead costs are generally even higher than universities because they have no other source of income other than grants (I used to be faculty at JCVI). HHMI is unusual in that it is funded by a rich person's estate and doesn't need this.
Is there a stat or place I can read more about that? I hear people throw throw the idea of administrative bloat around a lot but would be interested to see data behind that
Do you know that “overhead” costs are not equivalent to payouts to administrators?
> They are high relative to private industry.
Academia is not "private industry."
Private industry does not run campuses full of graduate courses and basic research that America’s technological prosperity depends on
Those overhead fees go to fund that, so universities don’t have to be even mere full of nepo baby donor legacy admissions than they already are
No, overhead doesn't pay for grad students or techs. That money comes out of the grant funding or tuition fees (if not funded off the grant)
Dude this IS the grant funding they’re slashing. The NIH (and other grantmakers) make research grants and the overhead fee from that goes to the university. This is precisely what they’ve cut
It's a tough situation. I agree administrative bloat is a real problem in universities, but cutting indirect cost recovery so drastically seems like a really blunt instrument. It's going to disproportionately hurt research programs, and freezing admissions is a pretty drastic first step. Hopefully the temporary pause gives them some breathing room to figure things out.
I know in my state school, none of the labs expect to be able to take any student, period, at least for now. Some labs have even told students they might need to find a new lab to finish their degree, which I don't know how that works. Right now, the uncertainty is playing a major role. Advisors don't know if their money will evaporate/not be renewed, and are highly doubtful that new grants will roll in. The people running federal labs are saying basically that the expectation is to run a tight ship and do the research that is necessary, but not to expect being able to run wide-ranging projects as they have, that everyone needs to reduce their size and wind down what they're doing to only what is necessary.
I certainly don't think shutting down American research and having a country where there are no new graduate students is a really sane scenario. I think some research is definitely inexplicable when it comes to being taxpayer-funded, and some labs are bloated and can run a tighter ship. But everyone is basically paying the price because of a small minority of labs who are operating as though they aren't receiving taxpayer money, and are conducting research that is truly pointless. Of course those labs exist, but they are a small group of labs... Clearly no one wants to spend the time to look at all the grants and projects individually to find the bloat. The strange part is that doing this sort of mass-culling actually just invigorates many to double-down on what they are doing if it is somewhat politically unsavory right now. So it really isn't achieving much other than recruiting an opposition to republican power, which is probably worth more to prevent than the money that could be saved.
I think it's realistic to assume that the federal government is going to just wholesale cut a lot of the science funding, because compared to other nations, America actually funds a whole lot of science, and from what I can tell, that's much less true in other countries. The effects of that might be a bit abstracted from this event, these cuts might just result in less scientific innovation, which could cost billions of dollars added up over time easily. But, if this is just a sort of shock-and-awe thing, and then money starts becoming available again and the result is that "DEI" practices are expunged from criteria, then maybe the takeaway is just that labs just act with a lot more caution. From what I see, most labs already operate under large amounts of caution because the grant system is tricky enough.
If only Penn had the richest and most powerful men in the world as alumni
Yeah, move over Harvard and Yale. Two of Penn's alumni are currently running the country.
As a Wharton grad, the place basically trains people to be ruthless and make money. Morality, history, and liberal arts are not part of the curriculum. It appears to have succeeded...?
Back then it used to be the running joke about economists: "if everyone takes care of himself, everyone is taken care of"
Now, imagine the alternative universe where the government was actually interested in reducing administrative bloat in universities. It could have introduced for example a limit on grant overhead on all future grants, which would have likely forced universities find saving in admin/sports etc. Obviously we don't live in that universe. We live in the world where capricious government with people like Musk who think they know everything better than everyone else just introduces arbitrary cuts. And then various commenters (including here) contort themselves trying to justify those cuts.
> It could have introduced for example a limit on grant overhead on all future grants
So exactly what they introduced, except not applying to current grants?
> forced universities find saving in admin/sports etc.
Aren't sports a net money generator for universities?
> Aren't sports a net money generator for universities?
only for a select few; most are a loss
This blog post gives some good context on why indirect rates exist and some more reasonable ideas for reforming the current system: https://goodscience.substack.com/p/indirect-costs-at-nih?utm...
Most departments at the moment are choosing to be conservative with their funds. No one really knows how their capacity, whether through grants or through teaching, is going to change. As far as I know, many universities are also pausing hiring for full-time employees (which is probably wise, at least until the dust settles). Really tough time to be looking for an academic appointment...
I'm grateful that I have enough funds to guarantee two more years here as a postdoc, but if things don't settle for the better there might not be a spot here anymore.
In the article, they did not specify if the funding cut is a result of re-structuring direct-indirect cost ratio (essentially no research cut but the administration cut only), or the fund granted to a fewer researchers. If they actually receive less money for the same current researches, there is no need to accept fewer students.
The government's decision to cap the overhead rate for university grants requires _more_ administrational burden rather than less, so the only thing to cut are the actual researchers.
Another example of the stupidity of Trump/Musk's actions.
Many of the comments here reveal a profound ignorance about the actual costs of conducting biomedical research, as well as a lack of knowledge what the Trump administration is doing to knee-cap NIH funding.
1. If you want to have some perspective on what indirect costs actually cover I'd recommend this video (published 2 years ago) by AAU, AAMC, and other partner associations. -- https://www.youtube.com/watch?v=yxTDlFvkvio
2. The courts have temporarily blocked the indirect cuts to existing grants, but the Trump administration is using other backdoor means to further withhold funding. See this article in Nature -- https://www.youtube.com/watch?v=yxTDlFvkvio
The long and the short of it, is that NIH is not reviewing grants or making awards at anywhere near "normal". Study sections are being cancelled at the last minute without any certainty about when they will be held. Investigators with existing multi-year grants don't know what to expect at renewal time. Factor in the layoffs at NIH and NSF as well.
The administration has also said they intend to cut NSF budgets from $9B to about $3B dollars.
Under these circumstances it would be irresponsible for universities to admit normal numbers of graduate students.
Even if tomorrow the Trump administration said "Whoops, we messed up" and reversed all executive orders, I'd estimate they've cost the US research enterprise something like 12-18 months of productivity. And we're only 1 month into Trump 2.0.
Here's some other knock on effects I anticipate we'll see in the next 3-6 months:
1. Opportunities for undergrad research will be greatly reduced. If you have a college age kid who's interested in engaging in research of any kind (sciences, humanities, engineering) they will have many fewer opportunities and those opening that exist will be even more competitive to get into.
2. Universities will cut way back on lab renovations, new facilities, and delay upkeep. Few people understand just how many tradespeople work on a university campus every day. This includes both facilities staff but also many outside contractors. This will have a major impact on blue collar jobs.
3. IT companies, biotechs, and scientific suppliers for whom universities are key clients are going to be hit hard. Expect layoffs and small companies to close up shop in this sector as the effects of research cuts percolate through the system.
Mike Caulfield says,
> If institutions don't push back together, they will cease to exist in the form they are now. I don't know how to say this more clearly.
And my heavens yes. This is the government threatening to end funding for universities. This movie here is no where anywhere near enough. This is an attempt to end the entire higher education system.
Does it need help & reform? Yes. But simply destroying education outright serves no good. This is a destruction of civilization by radical extremists. Universities need to be working together to defend against this mortal threat to the existence of higher education.
U Pitt's endowment is 5.7 Billion! The funding cuts are big but it's only ~2% of the endowment, why are they pausing PHD admittance rather than using the resources they have readily available?
The endowment as of June 30th 2023 was $5.5 billion. A year later it was $5.8 billion. If you add inflation and this spending cut alone, it has not grown.
Sure, it's "only ~2%", but surely I don't need to tell you how the money, meant to _persist in perpetuity_, a _237_ year old institution has accumulated to educate _30,000_ students is a different measure than an annual income? - a drop large enough to, as I pointed out above, no longer make it a viable sum of money in perpetuity?
Here I'm imagining you, sitting on let's say, $500,000 and thinking it's no problem if you spend _an extra_ $10,000 more every year, it's only 2%, and then wondering after a while where all the money to invest went, but where your money went entirely. I think rather than comment on a university's finances, better make sure yours are in order first because I suspect there's a troubling fundamental lack of financial literacy on display here that's going to come back to haunt you at some point.
This makes complete sense when the universities grand purpose is to perpetually aggregate money to manage as a tax exempt hedge fund.
endowment per student for the top universities runs mid-7 figures for places like Princeton (3.75M), Yale (2.7M), MIT (2.1M) etc. The endowment per student for UPitt in 2023: 172k, which really doesn't give it a lot of wiggleroom to spend while maintaining the purchasing power of the gift endowments over time.
This ends with America’s domestic biotech and pharmaceutical industry functionally disappearing and being shipped offshore, similar to many previously American led industries. This is already happening [1], and will only accelerate as academic bio research is strangled. There are all kinds of cultural justifications being thrown around for this, all kinds of grievances being rehashed or invented in real time, but it’s the same old story as manufacturing in America. It’s just wealthy powerful people stripping an industry for parts, disinvesting and pocketing the remains.
https://www.biospace.com/business/big-pharma-rushes-to-china...
The sudden cut on NIH funding is intended to maximize fear and chaos, and since this is NIH, the impact will be most felt in cutting-edge medical research. And I think that's precisely the point: Trump is in a rampage to destroy American institutions, his supporters hate higher education, and high-ranking research universities are a prime target.
Come on, are we supposed to discuss the finance of university administration as if this is some well-thought-out proposal to make America's universities be better and more efficient? Don't give in to the gaslighting. The barbarians have breached the gate and we're arguing whether torching down the main street would help us with next city council meeting.
This is the thing that really frustrates me: much of the discussion around the damaging effects of what Trump and Musk are doing seems to assume some sort of good-faith motivations on the part of Trump and Musk.
But that's not what they're doing. They're dismantling the executive branch of the federal government because they want less regulation for all their corporate buddies, and they want to privatize lots of government functions to, again, benefit all their corporate buddies.
And on top of that, they want to cut taxes (for corporations and the wealthy, mainly) at a level that will reduce tax revenue beyond the spending cuts they want to make. So they won't be balancing the budget, or reducing the deficit. We'll still have a federal government that borrows more and more money every year, but provides less and less to the people of the country.
That's it. There's no noble plan here.
To the extent that MAGA can be said to have a point, I think this is it. Deep underneath the arrogance and scapegoating, they’re calling bullshit on institutions that have become self-licking ice cream cones.
I think there’s some truth to that criticism. I would prefer to see the institutions reformed democratically than destroyed by fiat. I contend that sacrificing rule of law is deeply counterproductive. But the core complaint that things aren’t working? There’s some truth to it.
The core complaint is by no means new, and the Trump/Musk "solution" is worse than the problem.
The experiment that the US is running is unprecedented.
What if we screw all our allies, make them scared for their safety so that they start building their own weapons, dismantle completely the government apparatus by assigning clowns to lead it, gut the income by incapacitating IRS and bringing down all the institutions we built as a nation (universities, congress, courts etc).
I am trying to avoid conspiracies, but how would an enemy from within would look like, if not like this? The only thing not done yet is to point our own ICBMs at us.
Pitt has an endowment of 5.5 BILLION dollars [1].
It really does not seem like they paused all PhD admissions as an honest way to optimize their money. It seems like they are using their institutional power to protest Trump's policies, to create a sad state of academic research so that Trump is blamed for it until he reverts his policies.
I feel sad for the rejected PhD students that were caught in the crossfire of Pitt's protest.
[1] https://www.utimes.pitt.edu/news/pitt-s-endowment-2022-23
This is nothing more than Administrators administering to protect their influence and cushy jobs. https://www.theatlantic.com/ideas/archive/2024/05/bureaucrat...
This is likely a temporary move, intended to be used for rhetoric. Eventually the faculty will complain, because they rely on large pyramids of postdocs and grad students for almost all labor. There’s simply no way to continue the work of university research without a strong supply of grad students. Once this is realized, and the NIH doesn’t bend, then grad admissions will increase again, and admin cuts will start, as they should.
> this is likely a temporary move, intended to be used for rhetoric
It's a rational move given the U.S. governments word on payments and commitments is no longer credible. If your employer started bouncing paycheques, your cutting back on expenses wouldn't be "intended to be used for rhetoric." It's simple self preservation.
The tax cut ruins that, as would the DOGE dividend
> tax cut ruins that
Ruin what?
Fiscal responsibility
Amazing commenters here -- for them people are like cattle. "Temporary move". Graduate students without an offered position -- it's nothing, they'll just wait a bit. Cut one funding one day, maybe release later.
I didn’t say it’s a good thing. I think it’s dishonest and manipulative.
That or the volume of research will simply shrink and world class research will take place only in China.
The “large pyramids” are largely funded by federal grants. If the grants aren’t there, the grad students won’t be either.
Wait- do you think the grants have gone away? Do you even know what overhead is?
Didn't the NIH freeze the review meetings in this year's proposal review process, putting all grant funding that would start next fiscal year in question? This is separate from the change to the overhead rate.
I have zero sympathy for universities that work grad students to the bone, pay them a mere $25k stipend, and take >50% grant money for “overhead”.
The academia model is deeply, profoundly broken.
It's almost as expensive to hire a PhD student as a postdoc.
A postdoc makes something close to the median wage. While not great, it's enough that people in general are expected to buy homes and start families with incomes like that. You can't reasonably expect more from an early career job that doesn't produce anything with a direct monetary value.
A PhD student earns much less, because the rest is used to cover tuition. And that is the root issue. Neither the federal government nor the states pay universities to train PhDs. The tuition must be paid by the student or from another source. The former does not make sense if you are not rich. If tuition is paid from grants, stipends will be low, as funding agencies don't want to pay more for trainees than qualified researchers. And if the PhD student works as a part-time teaching assistant, undergrads are effectively paying their tuition and stipend. Raising undergraduate tuition fees to pay PhD students more would not be very popular.
The tuition is bunk. You take maybe 1 or 2 years of classes in your phd and its not a full courseload at all. At least in stem. The rest of the time you sign up for a fake class that doesn’t meet anywhere so you qualify as a full time student for health insurance. Except the rub is they still charge your pi for that tuition for the class that doesn’t exist.
Tuition is also used to pay the supervisor. Direct one-on-one mentoring by a tenured / tenure-track professor is more expensive than classes, which are often taught by adjuncts.
For what it’s worth, I remember well that I thought a 40k stipend in 2017 was an AMAZING opportunity, and was very excited to pursue a PhD for that reason (granted 25k today is significantly less). My requirements are different now, but at the time that was a great opportunity for me. Don’t knock the low-pay-opportunities too too hard, the most desperate people really want that offer, and it is still be a better stepping stone than a 0k stipend. Of course I’d also like if the offer was better.
That's like half of what I got hired for in the Tampa area (notoriously low pay) in 2011 with like 6 months of SQL experience and no college degree.
That's really depressing to be honest.
lol welcome to mechanical engineering. At the time, I think a good starting pay for a mechanical engineer was ~80k total. Getting half of that while pursuing a PhD seemed like a great deal.
> the most desperate people really want that offer
I don't think it's great the PhD programs disproportionately attract desperate talent willing to work for poverty wages.
I'm not saying the labs need to pay crazy BigTech wages. But the status quo is downright abusive. And nevermind all the perverse incentives around publishing.
Unfortunately in many areas its the only way to have a viable career, even if you aren't planning on going in academia (very few can) a PhD is a definite plus / nearly required in many industries.
Exactly right.
I had been lucky to supplement my phd stipend with big tech internships, but phd life was hell for most of my friends.
I have seen students living in slum-like conditions, 4-6 people sharing two bedroom apartments, having to get free canned food from the university, being forced to buy dangerous 20+ year old cars, and so on. These are the brightest minds of our generation.
It's sad to see so many of the comments coming out strongly in support of the status quo. Don't let your hatred for whoever the boogieman of the day is dictate your rational mind!
They could have more grad students if they reliably graduated them with a PhD in four years. I was once a lab tech for two grad students that had been there 11 and 13 years respectively.
Thats insane. In experimental science there is actually an incentive for the PI to keep the grad student around (assuming they're productive) because their training is a sunk cost but its very hard to justify more than 7-8 years.
Well it’s going to be totally destroyed now, so good job. Can’t have academia challenging the president with objective truth, can we? I’ll bet the new replacement funding, will have some sort of loyalty pledge to Trump strings attached.
Rich will get education anyways. Less fortunate will be squeezed out of opportunities. Nice.
"Roaring" 20's, amirite? It's just not us roaring.
[flagged]
"Eschew flamebait. Avoid generic tangents." - https://news.ycombinator.com/newsguidelines.html
These things lead to (very) low-quality threads, as seen below.
You can still get an education, you just have to be rich.
So the number of educated people in the country drops
The america that put a man on the moon had only 10% of adults with a college degree.
The America that launched 158 rockets to orbit in one year and landed most of the boosters for reuse had a substantially higher rate.
True, but in the 40s, 50s and 60s, High School Courses were very close to undergrad courses now in the US.
Back then, public schools were not afraid of failing students, plus hardly anyone in high school worked after school. Typically they work at summer jobs. Also if you dropped out at 16, you could find work at a living wage, not now.
Doge geniuses would have cut that 4% of the federal budget right before Apollo 11
It’s an interesting question. Would doge suddenly have a change of heart if they were trying to compete with a serious enemy?
Given Trump's stances this week, I somehow think we've gone reverse red scare and would just work to spread communism in America. We're just so different from 50/60 years ago.
we also had manufacturing jobs, strong unions, and a better minimum wage. We getting any of those back?
So, how was education doing in pre-1971 East Pakistan?
You mean like Pitt's endowment of 5.8 Billion?
Oxford and ETH Zurich will be open for the rich, but Trumpists openly despise higher education, and I'm not sure whether any American universities will be safe if Trump stays in power for four years.
RIP US-based Academia INC In the immediate term, obviously the center of academic research moves to Europe/Asia, but the longer term damage is irreparable. Where is the 0-1 basic research that fundamentally moves the ball forward going to come from? Clearly not the US anymore.
Great that you have invoked China. Guess what their research grant overhead is? 15-20%.
Source?
They would in the end vote against you. You can't let that happen.
Franco and Stalin both increased University funding.
Cuba to this day spends more of its GDP on education than any other nation on Earth.
Syria (under Assad) spent more than South Korea, Afghanistan more than Greece, Iran more than the UK, Egypt more than Ireland, Iraq (under Sadam) more than Japan, Saudi Arabia more than Canada, etc.
You can look it up, the more totalitarian the government the higher the spend on education not less.
There's three big cohorts that heavily fund their University systems:
1. The Nordic States 2. Former British colonies 3. Dictatorships
China doesn’t fund all of the bullshit research America does in the social sciences of dubious quality and reproducibility. I would love to axe everything that isn’t a hard science.
They have a whole fund for it called National Social Science Fund that funds non-STEM and alike research.
Yes. The only thing that contributes to society is science.
That's why we have museums devoted exclusively to science and the study of science. It's why scientists tend to write great books about the human condition.
Jesus Christ.
Also. Define hard science please.
It seems to me that wonderful books about philosophy and the human condition could be written without taxpayer funding, considering all of human knowledge is available at our fingertips
Why are we blaming Schools for using taxpayer funds and not the congress (or state govenor) who makes the budget? When did we celebrate shooting the messenger?
Also, this is pretty selfish reasoning. I'm sure the manufacturing jobs feeding us would take a stance to defund science as well. It's just a bunch of nerds playing around in a lab. They aren't contributing to the country.
What if... the taxpayers would like such books to be written?
If a Chinese university was spending 59% on overheard the university president would be imprisoned. The CCP has no tolerance for that kind of thing.
What part of these new policies helps address this issue?
The fact that the policies limit overhead to 15%?
Do you know what “overhead” means in this context?
You apparently have little idea how indirect rates work in academia.
Some basic math: A $500K grant with a 60% indirect will have 0.6*$500K = $300K worth of indirect costs on the 300K+500k= $800K grant. The indirect cost are thus $300K/800K or 37.5% of the total.
This compares well to cutthroat biotechs which have SG&A rates of 40 to 60%.
Further, the indirect rates in academia largely support services like histology labs, imaging cores, compute resources, safety training, and chemical disposal. It would be far more expensive if each lab had to contract out these services directly.
And America didn’t allow that for a long time. Obama attempted to cap indirect costs unsuccessfully.
America also has what appears to be an unlimited tolerance for undergraduate tuition fully paid for by non-dischargeable debt.
You’d be hard pressed to find another group in America with less sympathy than universities with the common man. Except perhaps government workers
That says more about the common man than it does about the institutions he hates, and it says nothing good about him.
The common man is definitionally the one whose’a opinions matter. Maybe academics should become worthy of the respect of those who fund their activities.
Should it? The common man didn't want women to vote 100 years ago (and didn't go to acedemia either). They didn't want minorities to be people (or I guess count as 60% of a person) 200 years ago. The common man could be wrong.
The common man approved these changes, eventually. That’s democracy. Violating the will of the people now because they didn’t always agree with you is not democracy. You would much prefer to live in a monarchy or some form of feudalistic society if you would prefer to override the will of the people
Yup. But they didn't change their minds overnight. And not without a lot of protesting, and even some bloodshed. That's what's trying to happen. People from 100 years ago before the 19th amendment would also interpret it as "violating the will of the people", but that's almost always how you change minds as a grassroots.
>You would much prefer to live in a monarchy or some form of feudalistic society if you would prefer to override the will of the people
Protesting a proposed monarchy does not mean I approve of a monarchy. I'm not really a fan of this kafkatrap esque narrative. People post-Women's suffrage would also complain, so it's not like you're critical to convince of this to get my goals.
So we should make sure everyone feels represented? That’s not working very well.
We live in a democracy!
> Democracy is the theory that the common people know what they want, and deserve to get it good and hard. Mencken
Elites forget who runs the show
> We live in a democracy!
We do. That's how we collectively decides what gets done. It's the least bad system for making decisions.
That doesn't mean we sometimes don't make some really fucking stupid decisions, and there's no way to whitewash it.
Just because a lot of people believe in something doesn't mean they are right, it just means that's what we are going to be doing. Plenty of democratic societies have made horrific mistakes in the past. American readers might be passingly familiar with the Declaration of Causes of Seceding States, while German readers may have heard of something that happened in 1932.
And since the election, the show is definitely being ran by elites, they just happen to be elites with a much wealthier PR department. It's wild, though, how they've duped people into thinking they are some kind of everyman-outsiders.
Anyone who still thinks the richest narcissist in the world and a slumlord from New York give two figs about some working class sap will be in for a surprise.
The disillusionment with elites has been brewing forever, such is the nature of common vs. elite. However I would say the outright detestment for normal people reached its pinnacle when Obama said people who don’t vote for him “cling to guns and religion” and Hilary Clinton said those voting Trump were a “basket of deplorables”. Such blanket statements from our leaders describing half the country truly proved the minds of those fully detached from the common man.
It’s fair to protest and disagree. It’s another thing to call those who oppose you in a democratic society “nazis” or other hyperbolic pablum.
The absolute failure and collapse of the American left will be studied endlessly over the coming years. It will rebuild. But the wilderness will be long and difficult.
I grew up in NoVA. The dominant attitude at the time among the cognitive elites who worked for government was that we know how to do things, and we’ll use our capabilities in service of doing the things the common people want. It was a veneer even then—for example immigration has been increasing for decades even though the majority has never wanted that. But at least lip service was paid to the order of authority.
Sometime between Bush and Trump I that was replaced by an attitude of “the common people are deplorables and our values and goals are better.” Same attitude we have in south asia actually.
> Such blanket statements from our leaders describing half the country truly proved the minds of those fully detached from the common man.
Of the two parties this past election, one ran a campaign of governing for all America, and the other of division, with a loud and clear goal of punishing the half of the country that didn't vote for them.
Yet, strangely enough, the latter campaign was the one that succeeded. It's strange how the standard for the two parties differs.
> It’s another thing to call those who oppose you in a democratic society “nazis” or other hyperbolic pablum.
Are you implying that it's somehow impossible for a democracy to elect a fascist or an authoritarian? Did the Confederacy, or the Reich just magically appear out of thin air?
(Bonus question: Why do they... Keep giving, and applauding Nazi salutes at rallies? Did they sleep through history class? Are they unaware of what that symbol means? Should I not believe what I see with my own eyes?)
Federal workers should just quit en masse to teach these guys a lesson. And make them hire back for 2x the salary.
Most people need their jobs to pay their rent and have health insurance and aren’t programmers with a LinkedIn inbox full of recruiters to draw on. They weren’t making a ton of money to begin with and many desperately need the job. Public service has nice long term benefits like a pension, but most federal employees are not well off by any measure.
I find people who feel glee at the suffering of these families disturbing.
If we could all group together, such a resignation wouldn't even last a day. It's the ultimate prisoners dilemma and we're slowly running out of options less drastic. everyone would benefit and few would lose their jobs compared to this still-fast slashing.
also, nitpick:
>aren’t programmers with a LinkedIn inbox full of recruiters to draw on.
It's not 2022 anymore. Those LinkedIn inboxes are empty for me. This market sucks.
a general strike is great and all, but didn't Reagan call the bluff with those air traffic controllers and just hire all new ones? Replacing top scientists in all the institutions is basically impossible, but for the most part, a lot of positions would be certainly easy to fill. Park rangers? Forest service employees? lab techs? These are jobs that tons of people with a Bachelor's would be more than happy to fill. Government employees generally want to keep their job for life. So most are more inclined to hide under the covers and try to avoid the spotlight. Though I have seen many get antagonistic and incredulous with recent events but I think it should be clear that people need to keep up. With this recent email sent out saying "reply or you're fired," I mean it's cute some people think they aren't going to reply, but they must do that at their own peril. I'd be replying quick.
Wrong strategy for the time. These people don’t care about what is lost, they’re greedy individualists, they don’t care about the country.
It hasn't happened in America, but I think people severely underestimate how devastating a real strike can be. Remember that the ports strike in October only lasted 2 days but estimated costs were already in the 10 (or even 11) figures.
A full on government walkout for a day would fix a ton. They won't care, but even their voter base wouldn't ignore the late payments, cancelled appointments, and overall confusion a day would do.
I'm all for the concept of a general strike, but I think the general public would be very unsympathetic with a government employee strike. People would be racing to put their name as someone willing to replace a striking government worker.
You’re wrong, their voter base would ignore everything short of their own children being killed. It’s tenacious smooth brain solidarity.
Every society is X missed meals away from anarchy. For a society like America that hasn't experienced famine en masse in almost a century, that X wouldn't need to be too high. They can ignore their kids but not their bare bones basics.
March 2020 almost became that.
Yes, do that! Quit ASAP!
amazing how many Americans can applaud this reduction when it is completely illegal. America works because of checks and balances and oversight. Obviously there are problems and grift.
But to think that everyone is okay that solving it means Elon and a hand picked group of 25 year olds can just slash budgets and see top secret documents when none of them would pass a drug test or screen means we are know looking at the fall of the American system
You sound like this: blocking bribing your politicians is bad. How people can applaud this?!!
Imagine having tds so bad you support fraud etc because someone managed to put a "legal" label on it.
Sadly, it'll have to hit their wallets directly before they realize they've been hoodwinked. I wish people would realize this sooner, but America's long been a country that reacted too late instead of taking preventative measure.
Imagine thinking that it's illegal to cut spending when you're $36 Trillion in debt. I think it should be illegal to NOT cut spending when you're at that debt level.
There are legal ways to cut spending and illegal ways to cut spending.
Yes, it is. In the constitution.
Moreover, anyone who paid the slightest attention to Trump's own words knows these cuts aren't paying off a deficit.
Time for these universities to pick up the tab and run a sustainable business that isn’t dependent on government handouts. If their research is high quality and valuable, it will survive.
The current state of academia paper mills, unreproducible research and rampant fraud are a direct result of the spigot of money and lack of accountability.
There's a good reason Acedemia and Business should be as separate as possible. Do you think we would have been researching EV's if Oil got to fund grants?
Innovation isn't found by making faster horses, you can't treat tomorrows tech as you would yesterdays line budget.
Complete bullshit. Research is high risk and frequently 0 return. It’s fundamentally not a sustainable business. Is it worth doing still? I would say yes.
These actions by the government are fucking over people who have dedicated years of their lives to pursue advanced research degrees and academic careers.
They are not “running a business”. The American research Universities have been reaping great rewards for relatively small investments.