University labor rates for personnel tend to be somewhat lower than those found in industry. Some in industry associate University research exclusively with student work. While students play a key role, projects are led by Ph.D. level scientists and supported by a professional research staff of engineers and technicians. Further, because students are performing in a professional capacity, they are paid for their time, and consistent with the rules of the graduate student union, projects also pay their tuition. Also covered are all costs associated with supplies, telephone and faxes, payments to subjects, travel to test sites and professional conferences, equipment, software, vehicle maintenance, fringe benefits and indirect costs.
Indirect costs cover space, heat, furniture, contract administration, legal support, and billing.
The indirect cost rate is established by negotiation between the University and its cognizant federal agency, the Department of Health and Human Services. Recognized costs are determined in a standardized procedure specified by the federal government's Office of Management and Budget. Indirect costs rates vary among universities because of differences in the level of state support, the extent to which high technology is supported, the age of the physical plant, and the size of the library system. Research universities tend to have higher indirect costs rates than teaching universities because a more sophisticated physical plant is required. Group policy is generally not to charge fees for using equipment the Group has, none of which is rented.