Updates on FY26 Indirect Costs, Tuition Remission, Equipment & Subaward Thresholds
Effective 7/1/25:
- Indirect Cost Rate
- Our federally negotiated F&A rate is currently under renegotiation and expected to take effect July 1, 2025. If a provisional rate is issued before then, we will apply the lesser of the current or provisional rate until the final rate is confirmed.
- Our federally negotiated F&A rate is currently under renegotiation and expected to take effect July 1, 2025. If a provisional rate is issued before then, we will apply the lesser of the current or provisional rate until the final rate is confirmed.
- Tuition Remission rate for Other Sponsored Activity (OSA) will be 62%
- For projects classified as Other Sponsored Activity (OSA) that include tuition remission:
- a 62% tuition remission rate will be applied in accordance with new institutional policy
- Implementation: new OSA awards will assess a 62% tuition remission rate
- Existing awards with a 64% tuition remission rate will stay at 64% for the life of the project
- Existing awards with a 64% tuition remission rate will stay at 64% for the life of the project
- a 62% tuition remission rate will be applied in accordance with new institutional policy
- For projects classified as Other Sponsored Activity (OSA) that include tuition remission:
- The threshold for Subaward indirect cost exclusion increases to $50,000
- Applies only to new subawards on or after 7/1/25
- Applies only to new subawards on or after 7/1/25
- Institutional Equipment Threshold Remains at $5,000
- Despite the federal revision, our institution will continue to apply a $5,000 equipment threshold for all proposals—federal, state, or otherwise. This aligns with the State of Illinois definition of equipment and ensures consistency particularly when funding sources are blended.
- Despite the federal revision, our institution will continue to apply a $5,000 equipment threshold for all proposals—federal, state, or otherwise. This aligns with the State of Illinois definition of equipment and ensures consistency particularly when funding sources are blended.
*These updates affect how the Modified Total Direct Cost (MTDC) base is calculated for indirect costs.
What You Should Do
- If your proposal has a budget start date on or after July 1, 2025:
- Use the revised budget template with a $5,000 equipment threshold and a $50,000 subaward threshold for indirect cost base calculations.
- SPA Budget Templates: https://sponsoredprograms.illinois.edu/research-topics/proposal-budgeting
- Use the revised budget template with a $5,000 equipment threshold and a $50,000 subaward threshold for indirect cost base calculations.
- For supplements, the rates and thresholds will remain the same for the entire period of performance
- For continuations, use the current F&A rate and if extending the period of performance for OSA awards, update the tuition remission rate to 62%
- SPA will setup a separate CFOP under the existing grant code to track continuation funding subject to the new 62% tuition remission rate
- SPA will setup a separate CFOP under the existing grant code to track continuation funding subject to the new 62% tuition remission rate
For existing awards, the thresholds and tuition remission rate remain the same for the life of the project.
Recently Updated FAQ’s
F&A rates were updated in the following FAQ’s associated with the CAM RP-03 Charging of Facilities and Administrative Costs to Sponsored Projects:
- What is the appropriate F&A rate for State of Illinois GOMB agencies?
- What is the appropriate F&A rate for use on non-profit organizations?
- What rate should I use for a subrecipient who does not have a negotiated F&A rate?
Monday, May 12, 2025 - 14:49