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New overhead rules endanger UROP funding

By Ramy A. Arnaout

The Undergraduate Research Opportunities Program "has become the most powerful and distinctively MIT-like element in the undergraduate educational experience," said Dean for Undergraduate Academic Affairs Travis R. Merritt last February.

Unsettling changes in government regulations in the year since then have seriously threatened UROP's future, as the embattled program faced the most difficult funding period in its 25-year history, according to UROP Director Norma McGavern.

The crisis had its roots in 1993 changes to the federal guidelines that govern the overhead and employee benefits costs on university research. Historically, the government had allowed MIT to waive these costs, which include physical plant, library, administrative, and other indirect research expenses.

But a 1993 revision of an Office of Management and Budget document said that effective July 1, MIT could no longer waive these costs.

The change held dire consequences for undergraduates since 80 percent of them hold UROPs at some point during their academic careers. The new rules affect the salaries of most students who do UROP for pay - 76 percent of the 1,082 UROP students in fall 1993, according to the UROP office.

Because those students' salaries would now incur overhead and employee benefits costs - 58 percent and 43.5 percent, respectively - the change would effectively double the cost of hiring students for the last half of the summer, said Comptroller Philip J. Keohan.

Researchers would most likely hire only about half as many UROP students if they became twice as expensive, Merritt said last February.

The rule changes were intended to correct what the congressional General Accounting Office called the "lax oversight practices" of agencies supervising research activities and monitoring indirect costs.

"UROP is inadvertently caught in these revisions," McGavern said. The program "was by no means singled out. If you look at the language of the document, you would be hard-pressed to fit that language to UROP," she said.

But solving the problem is "not that easy," McGavern continued. "Just because something is inadvertently caught, it's not like saying [to the government], Excuse me, please, could you please move your foot?"' would fix things, she said.

Part of the problem is the way the revised regulation treats UROP. "In the document, UROP looks like a research project" instead of an educational one, McGavern said, despite what many people see as the program's underlying educational merit. But the distinction between research and education is not entirely clear, since some people consider UROP to be a little bit of both.

MIT mobilizes in spring

The funding crunch was expected to be especially difficult over the summer, when more students turn to UROP for pay instead of credit, McGavern said.

In response to the threat the new regulations posed for summer funding, Provost Mark S. Wrighton appointed a working group to explore possible solutions to the funding crunch. Wrighton's group was only one of several efforts community members undertook to defend UROP this past spring.

Anne S. Tsao '94, then vice president of the Undergraduate Association, distributed packets to students that described the problems facing UROP. The packets also suggested that students write to their senators and representatives asking them to help save UROP. In a separate lobbying effort in April, three students traveled to Washington, D.C. to meet with government officials to seek a solution to the crisis.

Locally, students and faculty discussed a number of options for restoring the lost funding in a forum sponsored by the Undergraduate Association on Feb. 14. One solution, dedication of $2 million of the Institute's general operating budget to cover UROP's expected overhead costs, would be a "very difficult possibility," said Wrighton, who was the featured speaker at the event.

Another option, taking the $2 million from MIT's endowment, would present even graver problems, Wrighton said: Since only about four-and-a-half cents on every dollar of endowment can actually be spent on projects, a $50 million endowment increase would be needed to cover the UROP bill, he said.

The gravity of the summer funding situation evoked apprehension from faculty and students.

The new rules "will have far-reaching and very unpleasant consequences for both faculty and students," said Professor of Physics Walter H. Lewin in a letter to the Faculty Newsletter in the spring.

"I can no longer justify in my grants the hiring of an undergraduate student," Lewin said. He offered this economic argument that two UROP students would cost as much as one graduate student, but would produce less.

$1 million saves summer UROPs

A $1 million infusion from the provost's office last April to keep funding for summer UROPs close to 1993 levels met with widespread relief. The contribution came from funds that function as an endowment "that [has been] set aside to deal with abrupt changes in funding from research sponsors," Wrighton said.

"I'm delighted," said James L. Elliot, professor of earth, atmospheric, and planetary sciences and a member of the working group, at news of the contribution. "We certainly needed something as an emergency measure so that the summer UROP wouldn't be devastated."

In another successful effort, Keohan prepared MIT's 1995 employee benefit package with a UROP benefit category that "would include only the benefits that the students actually get: Social Security (when not registered), Medicare, and workman's compensation," according to a May memorandum to Wrighton from the UROP working group.

The final benefits rate for the summer after the changes was 6.5 percent, down from the 43.5 percent benefit rate initially required by the government, McGavern said. In a lesser development, the overhead rate fell slightly to 52 percent, instead of the projected 55 percent, McGavern said.

All told, the combination of the infusion, the benefit rate reduction, and understanding by faculty mentors was able to keep summer involvement near 1993 levels, according to the UROP office.

However, these events did not prove to be a cure-all for UROP. The summer's financial strain forced the office to allocate a significant portion of its fall budget to meet summer demand, according to an office memo. While students' funding requests topped $1.3 million, UROP had only $400,000 to distribute.

"We must now begin to secure the resources needed to maintain UROP in the period beyond the summer of 1994," said Wrighton after the April announcement of the $1 million infusion. "Unfortunately, the resources of the Institute are not sufficient to simply add the needed funding to the recurring budget of the UROP Office."

Without the additional funding, however, UROP participation did suffer some from the effects of the revised regulations. The number of paid UROP students fell 38 percent, from 827 to 515, compared to the fall 1993 term, McGavern said.

While more students turned to credit - the number of credit students rose 15 percent to 293 - the total number of people with UROPs fell by 25 percent, from 1,082 to 808.

The drop was anticipated, McGavern said. Her concern now centers on how UROP will fare next summer, when the office will again be swamped with students looking to take UROPs for pay.

Outlook still unclear

The government's changes and UROP's difficulty in responding to it "are not good portents for the future," McGavern said.

The program is taking steps to assure a strong funding base for the near future. This year, "UROP was the star of an alumni fund drive which has resulted in getting us $100,000 for UROP endowment," McGavern said, although she noted that only about four cents on the dollar can be used for funding.

UROP also received a number of monetary gifts throughout the year. "We hope that will continue," McGavern said.

But government funding is still important to UROP, which recieves part of its $800,000 annual funding from the government.

Whatever happens in the government "all filters down to MIT" and then on to UROP, said administrator Debbie H. Shoap.

"It is clear that UROP will survive, something that was not obvious last spring," McGavern wrote in the Faculty Newsletter. "UROP still fits MIT students and faculty better than just about anything else students and faculty do together.

"What makes this struggle especially poignant right now is the fact that it was exactly 25 years ago, in the fall of 1969, that UROP began," through the vision of its founder the late Margaret L. A. MacVicar '65, former dean for undergraduate education, McGavern wrote.