The federal government is the largest source of academic research and development (R&D) funding in the United States, providing funds through more than two dozen federal agencies. U.S. colleges and universities, often referred to as institutions of higher education (IHEs), play a role in the U.S. R&D ecosystem and in supporting American innovation, competitiveness, and economic growth. In 2023, federal funding accounted for $53 billion of the $102 billion in R&D performed at IHEs. This report provides an overview of indirect costs, including how indirect costs are calculated; the history of debates over federal funding for indirect costs and selected federal activities associated with indirect costs, including recent actions by the National Institutes of Health (NIH), the Department of Energy (DOE), the National Science Foundation (NSF), and the Department of Defense (DOD); and options and considerations for Congress regarding potential changes to current indirect-cost-related policies. The report focuses specifically on indirect costs associated with federally funded research at IHEs.