Administrative Updates Uncategorized

OVCR Office Hours: June 18th, 2025

by UNC Research

This forum for the research community led by leadership from the Office of the Vice Chancellor for Research covered information available as of 10 a.m. on June 18, 2025. 

Session Summary:

During June’s Office Hours, updates included proposed changes to the Facility and Administrative (F&A) reimbursement rate models; federal-level developments including Congressional actions; and legal matters affecting research funding, with particular attention to NIH-related decisions and their potential impacts.  

OVCR Office Hours

Key Points

  • Proposed Revised F&A Models
    • Joint Association Group on Indirect Costs, comprising high-level research organizations in the U.S., has been convened to identify reform solutions for the indirect cost models. The group aims to ensure that the actual costs of research are covered and to establish a functional model for federally funded research nationwide. 
    • Two new models for F&A reimbursement have been proposed by the JAG and can be viewed on the Council for Government Relations’ website. Slides that describe the two models in detail can be downloaded here.  
      • Carolina would be able to adapt to each of the proposed models. 
    • The vice chancellor for research is a member of the JAG and has been working closely with stakeholders to develop and discuss ideas. We look forward to presenting a final proposed model to decision-makers in D.C. sometime in July.  
    • Carolina is in a strong position to inform the conversation around F&A models because we track research spending and ensure that all indirect cost reimbursements are used to support research costs. From our perspective, it is critical that any proposed model covers actual costs of research.  
  • Federal Landscape
    •  FY26 Appropriations: Regarding the FY2026 appropriations, the President’s budget proposal anticipates funding reductions across various federal agencies, including NIH and NSF. However, this is just a proposal, as Congress controls government funding. Administrative officials have been testifying before Congressional committees, addressing budget concerns, grant terminations, and indirect cost caps. 
    • Budget Reconciliation: Simultaneously, a budget reconciliation process is underway in Congress, a tool used by the majority party to pass tax revenue bills with a simple majority in the Senate. While the House passed its bill in May, its fate in the Senate is uncertain, with challenges expected from conservative members in the House if amended. This process includes proposals to limit graduate PLUS loans, annual unsubsidized loans for grad students, and changes to Pell Grants. 
    • Student Visas: The Secretary of State issued a temporary pause on new student visa interviews in May, causing uncertainty for incoming international students, though most of our students had already scheduled interviews and received their visas. The State Department also announced intentions to revoke visas for Chinese students with ties to the CCP and those studying in critical fields. Additionally, two executive orders were issued in early June related to international travel for students, restricting citizens of 19 countries and specifically limiting international students from attending Harvard University. 
  • Legal Updates
    • F&A Reimbursement Cap: Several legal challenges are ongoing against various agencies’ attempts to lower indirect cost rates, typically to 15%. In all these instances, our negotiated rate remains in effect, and the agencies’ attempts have been stayed or enjoined. The NIH case is on appeal, an injunction has been issued in the DOE case, a Temporary Restraining Order (TRO) was just issued in the recently filed DOD case, and NSF continues to agree not to implement the rate cut while litigation proceeds. 
    • Legal Action Against NIH: Two lawsuits have been filed against NIH, challenging federal directives that led to numerous grant terminations. A recent court hearing on this case resulted in a ruling vacating those directives. While a written order is still pending, the expectation is that a significant number of terminated grants will be reinstated. This is not expected to be limited only to grants with clear DEI components. 
    • Resuming Work: Reinstatement of terminated projects, even with a favorable court ruling, requires official notice from the individual agency (e.g., NIH) before research can resume.  
    • State Reversals: There is a possibility that terminations of state contracts could be reversed if they are tied to federal funding that is reinstated due to court decisions. 
  • University Impact
    • NIH Foreign Subawards: The University is actively monitoring changes announced by NIH regarding foreign subawards, as this could significantly impact many projects if foreign subawards are no longer allowed. While guidance from NIH is currently sparse, there are indications of new guidance coming soon. 
    • NIH’s Notice of Civil Rights, Term and Condition of Award Policy: OD-25-90 required certification of compliance with a new federal definition of civil rights obligations and prohibited engagement in research involving DEI or discriminatory boycotts, was initially issued, then rescinded, reenacted, and finally rescinded again. This means the term is no longer required, and the policy is not in effect. While this currently allows for private funding opportunities without restriction, future guidance from NIH is possible. 
    • Please Note: The recent court order affecting NIH’s DEI-related directives does not impact the restrictions on foreign subcontracts. This restriction remains in place, and the university continues to seek ways to navigate research involving international sites. 
  • Leadership Support and Guidance
    • Advocacy Continues: University and OVCR leadership continue to actively engage in advocacy efforts with national associations, government affairs teams, and directly with members of Congress and their staff to address these issues. 
    • Private Research Funding: For faculty considering private funding opportunities, while there are currently no restrictions due to the rescinded NIH civil rights policy, caution is advised in drafting proposals, as future guidance could reintroduce restrictions. Consultation is available for specific questions on this. 
    • HR Updates: The OVCR is in active conversations with the System Office and campus HR to clarify restrictions on HR actions, including those impacting temporary research staff. The office will provide updates as they become available.  
  • Other Insights
    • Appeals: The NIH Director has teased the launch of a “fast-track appeals process” to address recent grant terminations, with details expected in the coming weeks, aiming to reverse many of the grants that were cut. This initiative follows widespread concern over the cancellation of over 2,000 grants, totaling $9.5 billion, and federal contracts. 
    • Impact: Regarding the court ruling on DEI directives, the impact on other federal agencies that terminated contracts is uncertain, but it is primarily expected to affect NIH. 
    • Communication: As always, please confirm any information you may receive from unofficial channels with official communications that you receive from OVCR, the provost, or a federal agency before making assumptions on changes to operations or programs. If you receive any official communication directly from a federal agency, please inform the Office of Sponsored Programs and the OVCR.