A rate cut at the National Institutes of Health could cost the University of Alabama $2.85 million annually and diminish funding for the University of Alabama in Huntsville as well, officials said.

UAH could lose $105,000 each year, the official said.

“The research conducted at our institutions is a core component of the University of Alabama System’s mission to improve lives through teaching, research and service,” the university told AL.com in a statement. “Our research advances life-changing and life-saving discoveries, and a funding reduction to the real costs necessary to conduct this critical research would significantly impair our research mission and result in economic and job loss in Alabama.”

A federal judge on Monday temporarily blocked the Trump administration’s cut to the NIH’s indirect costs to 15%.Indirect costs provide money beyond the grant amount for things like administration or equipment, and can go well beyond 15%. Several states signed on to a lawsuit calling for a pause in the cut, and that pause went into effect earlier in the day. But all of the states that joined the suit are led by Democrats. So, the cut still holds for universities in Alabama.

It hits especially hard at the University of Alabama Birmingham, the largest employer in Alabama. UAB officials estimate the cut could cost the institution about $70 million a year. “Drastically lowering NIH indirect cost recovery jeopardizes life-saving research, and it would also result in job and economic loss in Birmingham and Alabama,” the university told AL.com in a statement.

While the estimated economic hit on UA and UAH is not as significant as at UAB, which is widely known for its biomedical research, the impact could be felt in Tuscaloosa and Huntsville — also the home of the HudsonAlpha Institute of Biotechnology — in the loss of jobs and businesses due to spending cuts.

UA received $13.6 million in NIH grant funding in FY 24, up from $9.8 million in FY 23.

UAH received $660,051 in NIH funding in FY 24, $424,040 in FY 23, according to National Science Foundation Higher Education and Research and Development data.

Indirect cost rates vary at institutions depending on the type of work funded because some, such as training and career development, are less expensive to conduct. UA’s negotiated maximum rate for indirect costs is 51% for organized research, recently increased from a rate of 49% in FY24, according to the university.

UAH’s negotiated maximum rate for indirect costs is 48%.

NIH says it pays an average indirect rate of 26% on the billions of grants it disburses annually.

HudsonAlpha, a nonprofit in Huntsville, has received almost $23 million in funding from NIH since 2021. In FY 24, received $2.2 million in funding, $861,000 in 2023, $6.5 million in 2022 and $13 million in 2021.

HudsonAlpha Director of Communications Adam Kelley said, “We continue to monitor the situation and are working with our elected officials as we await direct communication from federal agencies about potential changes to our federal grants or awards.”