U.S. Department of Energy (DOE) Lowers Indirect Cost Rate to 15%

Update: Temporary Restraining Order prohibiting DOE from implementing 15% Rate Cap Policy

A federal judge issued a temporary restraining order April 16th, 2025 after the Department of Energy announced that it would place a 15% cap on indirect cost rates for university research grants and terminate current grants that do not adhere to the cap.

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U.S. Department of Energy (DOE) Lowers Indirect Cost Rate to 15%

On Friday, April 11, the U.S. Department of Energy (DOE) published a memorandum titled “Department of Energy Overhauls Policy for College and University Research, Saving $405 Million Annually for American Taxpayers,” which aims to limit the indirect cost recovery on all DOE awards to 15%.

In response, the AAU, APLU, ACE, and “Universities Contesting Cuts to Energy Research” submitted a legal filing on Monday, April 14. The same day, LSU received a conditional termination letter from the DOE for all awards, the condition being LSU’s acceptance of the 15% indirect cost rate by May 14.

Under the new indirect cost rate, the flagship campus could see a loss of about $1.3 million, primarily impacting the College of Science and College of Engineering. We encourage all investigators and research administration staff to expedite the review and submission of costs associated with DOE awards and will continue to share updates as we learn more.