MIT President: Endowment Tax and Federal Pullback Shrink Research, Grad Pipeline

MIT President Sally Kornbluth told the campus community that despite Congress partially restoring research agency funding earlier this year, federal dollars are not reaching MIT at historical levels. Campus research activity funded by federal awards has dropped more than 20% year-over-year, new federal awards are down by a similar margin, and total sponsored research activity — including non-federal sources — has contracted 10%. A new 8% tax on endowment returns, which hits MIT and a small number of peer institutions, is compounding the squeeze, and some agencies are reportedly weighing geographic factors alongside scientific merit when allocating grants.

The funding pressure is cascading into the talent pipeline. Policy changes affecting international students and scholars are deterring applicants, and principal investigators uncertain about future grant support are admitting fewer graduate students. Outside Sloan and the EECS MEng program, new graduate enrollment for next year is down nearly 20%, translating to roughly 500 fewer incoming grad students — fewer researchers advancing projects and fewer mentors for undergraduates.

Kornbluth said institute-level bridge support is a short-term measure, not a fix. MIT is responding by chasing industry partnerships (citing the new MIT-IBM Computing Research Lab), pursuing master’s-only revenue programs, expanding philanthropy, and lobbying both parties in Washington against the endowment tax. The broader warning: a sustained contraction in U.S. basic research will throttle the future supply of scientists, innovations, and discoveries.