Federal efforts to cap reimbursements for indirect research costs at universities have faltered after legal and legislative pushback. One year after the administration proposed limits on overhead rates, agency attempts to implement the change were blocked by courts and diluted in Congress, leaving institutions’ research‑cost recovery rules intact for now. University research offices and federally funded investigators welcomed the pause; they argued caps would have strained labs, reduced university capacity to manage grants, and complicated long‑term projects. Lawmakers cited potential damage to the nation’s research competitiveness in rejecting the administration’s approach. The episode leaves open future policy debate over research finance; institutions are monitoring agency rulemaking and preparing to defend indirect‑cost recovery formulas in upcoming appropriations cycles.