US universities spent $117.7 billion on research and development in fiscal year 2024, an 8.1% increase over FY23, according to the latest Higher Education Research and Development (HERD) Survey released by the National Science Foundation.

The Association of American Universities published its analysis of the federal data this week. Graham Andrews, a research analyst at AAU, compiled the summary.

How much did institutional funds grow?

Universities directed $30.2 billion of their own funds — 26% of the total R&D pool — into research in FY24, a 9.1% rise over the prior year. That figure includes more than $7 billion in unrecovered facilities and administrative (F&A) costs: expenses for research laboratories, high-speed data processing, regulatory compliance, and other infrastructure that universities absorb without full federal reimbursement.

The institutional contribution grew faster than the overall R&D pool, which means universities are shouldering a rising share of the indirect cost burden. R&D administrators tracking reimbursement rates will note that the gap between negotiated F&A rates and actual recovery continues to widen.

Where does the rest of the money come from?

Federal agencies supplied 55% of university research funding, or $65 billion. The largest contributors, per the AAU summary, are the National Science Foundation, the National Institutes of Health, the Department of Energy, the Department of Agriculture, and NASA.

Universities compete for those awards through merit review. AAU's release observes that "even though more than half of university research is funded by federal agencies, universities account for only about 30% of the research and development that the federal government finances." That ratio carries weight for bench scientists and lab directors: national labs, FFRDCs, and industry performers absorb the remaining 70% of federal R&D dollars.

How concentrated is the spending?

The 69 U.S. member institutions of the AAU accounted for 60% — or $71.1 billion — of all university R&D expenditures in FY24. The remaining 40%, or $46.6 billion, flowed to the other reporting institutions.

AAU's framing casts the concentration as evidence that a small set of universities drives the bulk of U.S. academic research output. R&D managers at non-member universities frequently benchmark against the per-institution averages when planning capital projects, faculty recruitment, and shared core facilities.

What do the FY24 totals not capture?

The HERD figures cover universities' 2024 fiscal year, typically July 1, 2023, through June 30, 2024. The data therefore precede "recent changes to the federal funding landscape," as the AAU release states explicitly.

R&D managers using these figures for portfolio planning should treat the 8.1% growth rate as a baseline rather than a forecast. The next HERD release will show whether institutional and federal momentum held through the policy shifts of the intervening year.

Where are AAU members directing the new funds?

AAU's release lists several research priorities its members plan to advance: medical diagnostic tools, U.S. manufacturing, drug discovery, American agriculture, and technologies for protecting military personnel. The association also cites past federally funded university research as the source of widely deployed technologies, including MRI, GPS, and the underlying algorithms behind Google search.

The figure to watch next is the next HERD release — specifically any change in the institutional-to-federal funding ratio, which will signal whether universities are substituting for, or crowding out, federal support.