Announcement: The National Science Foundation (NSF) has announced an update affecting all new financial assistance awards to Institutions of Higher Education (IHEs). Effective May 5, 2025, NSF will implement a new policy requiring a standard indirect cost rate cap of 15% (based on Modified Total Direct Costs – MTDC) for all new grants and cooperative agreements to IHEs where indirect costs are allowable.
Key Points for USC Researchers:
- Applies to all new NSF awards and subawards issued on or after May 5, 2025.
- Does not apply to existing awards, continuing increments, or supplements to prior awards.
- Budgets for new proposals must reflect an indirect cost rate of no more than 15% MTDC.
- The 15% cap simplifies and standardizes NSF’s funding process across institutions.
USC is closely analyzing this new guidance and actively engaging with our higher education association partners to assess its full implications. We recognize that certain aspects of the notice require further clarification, and we will provide guidance as more information becomes available.