The Johns Hopkins University and the University of Maryland, College Park are fighting in court to protect millions of dollars in federal research funding from the U.S. Department of Defense, according to a new lawsuit the schools filed Monday.

The two universities, joined by 10 other universities and university systems, are suing the defense department and U.S. Defense Secretary Pete Hegseth over an attempt to slash indirect cost rates to 15% for research funded by the department. Currently, Hopkins has a 55% indirect cost rate and the University of Maryland has a 56% rate, according to the lawsuit.

The day after the schools filed suit, U.S. District Judge Brian Murphy in Boston issued a temporary restraining order blocking the changes, for now. The judge scheduled a hearing for July 2 where he will consider issuing a longer-term preliminary injunction.

The National Institutes of Health, the Department of Energy and the National Science Foundation all similarly tried to reduce indirect cost rates earlier this year and those efforts have been blocked so far in court.

Hegseth’s demands for cost-cutting by his department are “clearly unlawful and the harms it inflicts are irreparable,” said the universities in a lawsuit filed Monday in U.S. District Court in Massachusetts.

“Vital scientific work will come to a halt, and the pace of scientific discoveries will slow,” the lawsuit said. “Progress on national security objectives, such as maintaining advantages in areas like artificial intelligence and quantum computing, will falter.”

When researchers receive grants, most of the money goes to expenses related to their work, such as equipment, supplies and salaries. The government also negotiates to provide additional funding based on a percentage of the original grant. That extra funding can be used for indirect costs, such as building maintenance, library resources and administrative support.

If the indirect rates are slashed to 15%, according to the lawsuit, “America’s standing as a world leader in scientific discovery will decline.”

Representatives for the University of Maryland did not immediately respond to requests for comment. A spokesperson at the Department of Defense said that “as a matter of policy, the Department does not comment on ongoing litigation.”

“If enacted, these steep and sudden cuts will undermine research at Hopkins and around the country that supports our service members and veterans and protects America,” Hopkins spokesman Doug Donovan said.

The two Maryland universities are joined in the lawsuit by Arizona State University, Brown University, the California Institute of Technology, the regents of the University of California, Colorado State University, Cornell University, the University of Illinois, the Massachusetts Institute of Technology, the University of Pittsburgh and the University of Washington. Also party to the lawsuit are the Association of American Universities, the American Council on Education, and the Association of Public and Land-Grant Universities.

There are 341 active Department of Defense grants at Hopkins, totaling $436.5 million in funding, according to the court documents. The majority of that funding goes to the university’s School of Medicine and Whiting School of Engineering, which work to develop treatments for wounded service members and create advanced technologies that troops use in combat.

Of the approximately $122 million in funding Hopkins received from the Department of Defense in 2024, about $90 million was allocated to direct costs, with around $32 million allocated for the defense department’s share of indirect costs.

If the indirect cost rate is reduced to 15%, according to the lawsuit, Hopkins expects to lose $22 million.

Since January, federal agencies have cut at least 90 grants for Hopkins, resulting in the loss of more than $50 million in research funding for the university. That is on top of $800 million the university lost as a result of cuts to USAID. There has also been a decline in new federal research awards at the university, which are down by nearly two-thirds since January. In response, Hopkins has vowed to use some of its $13.2 billion endowment to help fund research, conducted its biggest round of layoffs in its history and frozen staff hiring.

This is the second time this year that Hopkins has joined a lawsuit against the federal government as a named plaintiff. The university sued in February to block the proposed cut to indirect reimbursement rates at the NIH.

The University of Maryland, College Park, which has “established significant partnerships on national security matters” with several Department of Defense labs, is also on the hook to lose millions if the indirect cost rate is slashed.

The state’s flagship public university receives approximately $125 million on Department of Defense-funded awards on an annual basis, according to the lawsuit. The university is expecting to lose approximately $7 million under Hegseth’s policy.

Hegseth first announced the decision to cap indirect cost rates at 15% in May, issuing a memorandum to senior department directors to cap the rates by June 4, including on current research projects.

But much of the research being conducted at universities in collaboration with the defense department “cannot proceed under a 15% cap,” the lawsuit argues, and the department “has not even attempted to assess the effects of jettisoning the approach that has prevailed for six decades.”

Hegseth’s 15% cap only applies to universities, not to other defense department grant recipients, even though they compete for the same awards.

According to the lawsuit, “most DOD-funded research occurs at outside institutions, including universities.” In 2023, the department awarded more than $9 billion to over 470 universities across the country.

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