The cost of setting up newly hired science faculty members with laboratory space and equipment is sapping an increasing portion of US university budgets. That fact, coupled with the federal policy of granting fewer dollars for overhead research costs, means that US schools are now shouldering a significantly greater share of the costs of scientific research, a new study reports.

"The question is, if they didn't have to bear these costs, what would they do with the money?" said Ronald G. Ehrenberg, lead author of the study presented Tuesday (May 20) at a Cornell Higher Education Research Institute conference in Ithaca, New York.

Ehrenberg and colleagues surveyed 572 faculty department chairs about the costs of setting up a laboratory for new faculty. Start-up costs for junior faculty in biology departments ranged from $403,000 to $437,000 at private universities and from $308,000 to $430,000 at public ones. Costs for senior faculty in biology ranged much higher, from $957,000 to $1.5 million for private universities and from $651,000 to $856,000 at public institutions.

These costs have been escalating since the 1970s, according to the study by Ehrenberg, Irving M. Ives Professor of Industrial and Labor Relations and Economics at Cornell, graduate student Michael J. Rizzo, and George H. Jakubson, an associate professor of labor economics at Cornell.

From 1970–1971 to 1999–2000, research expenditures per faculty member increased from $70,000 to $140,000 at the 228 universities surveyed by the authors. And in that period, the portion of those expenditures paid for by universities rather than federal grants roughly tripled. The percentage of research expenditures per faculty member paid out of universities' pockets rose from 11.2 to 20.7%, the study found.

In the past 30 years, the US government has sought to reduce the amount it gives universities for overhead costs such as maintenance, utilities, and administrative oversight. These "facilities and administration" (F&A) costs also include items such as researchers' salaries, reagents, travel, and certain equipment.

In most federal grants, for every dollar granted for research, another 55 cents is added to cover these costs. But this "indirect cost rate" of 55% has been steadily decreasing since 1983, when the figure was about 60% for private universities. On average, private universities are receiving 8.3% less money than they did in 1983. At public universities, the indirect cost rate was historically much lower because states often contributed to infrastructure costs, but over the past 30 years, many states have withdrawn a substantial amount of support for their universities.

Surprisingly, the study found that the new burden has had only a small negative impact on faculty–student ratios and the substitution of lecturers instead professors to teach undergraduate classes. But Ehrenberg noted of the universities' additional outlay, "If we spend more on the indirect costs of research we can't give stipends to as many undergraduate and graduate students or pay for extracurricular activities."

A study by the RAND Corporation in 2000 found that 10 to 30% of universities' spending for F&A costs is not being reimbursed by federal grants. Some of the slack is being taken up by corporate matching funds, donations, and endowments. But increased reliance on corporate funding of research raises questions about how this funding is changing the nature of research goals.

Universities are concerned about the lack of federal dollars. "Our institutions seek fair reimbursement for the cost of doing research," said Richard Turman, director of foreign relations for the Association for American Universities, an organization representing 63 top North American research universities.