The Budget Cuts to Come
WASHINGTON — If Congress does not agree on a long-term plan to reduce the deficit by the end of the year, most higher education programs will face deep cuts in the mandatory spending reductions that go into effect Jan. 1, according to a report released Friday by the White House’s Office of Management and Budget.
For months, advocates for education funding (as well as those concerned about other budget areas) have braced for the cuts, known as sequestration. When Congress made a last-minute deal to raise the debt ceiling last year, the cuts were set to take place as a threat to drive a long-term agreement to sort out the nation’s finances: either a bipartisan committee would agree on budget cuts, or $1.4 trillion in mandatory cuts would kick in. In November, the committee announced it could not reach an agreement.
Friday’s report is the first look at how, exactly, those cuts would be distributed among domestic programs. And for many higher education programs, the outlook isn’t good: an 8.2 percent across-the-board program cut for domestic discretionary programs, which make up most of the higher education budget, and a 7.6 percent cut for mandatory spending programs. While the Pell Grant is protected from the cuts during fiscal year 2013, as is the College Access Challenge Grant, other federal financial aid programs would be cut by 8.2 percent across the board, including the Supplemental Educational Opportunity Grant and federal work-study. Student loan origination fees would also increase. (Note: This paragraph has been updated to correct the percentage by which the supplemental grant and work-study would be cut. It is 8.2 percent, not 7.6 percent.)
The federal programs whose grants sustain university research — the National Science Foundation and the National Institutes of Health, as well as the National Endowment for the Humanities — would see the same across-the-board 7.6 percent cut to mandatory spending and 8.2 percent to discretionary spending.
Federal college access programs, such as TRIO and GEAR UP, would also see a 8.2 percent cut.
The fact that many programs would come in for cuts wasn't a surprise to higher education lobbyists here. And, they said, at least Friday's report provides some clarity as to what the programs would be facing if, as many predict, Congress does not reach a deal by Dec. 31.
"Now that we have the report, we know what the impact is going to be," said Terry Hartle, senior vice president for public affairs and government relations at the American Council on Education. In addition, he said, the details on what domestic programs would be cut might shift the national discussion away from the mandatory defense cuts, which have been the focus of most of the debate thus far.
"If you talk about defense, everybody gets that right away," Hartle said. "If you try to talk about cuts to domestic programs, people get sort of glazed over."
In a statement, the Association of American Universities said the report "confirms the worst."
"A budget sequester in January," Hunter Rawlings, the group's president, said in a statement, referring to the mandatory cuts, "would have a terrible short- and long-term impact on the nation's investments in scientific research and education."
In New York State, where public and private colleges estimated the damage a sequester would do before Friday's report was released, the cuts would mean 6,500 students might lose assistance from work-study programs, and 7,000 could lose the Supplemental Educational Opportunity Grant, according to the City University of New York, State University of New York, and Commission on Independent Colleges and Universities of New York.
While Friday's report provided some clarity, the possibility of across-the-board cuts means uncertainty will rule at least until early 2012. While both Congress and the White House have said they want to reach a deal to avert the cuts, many don't expect any action until after November's elections — and possibly not until January, after the cuts have already taken effect.
In that case, any budget deal would probably block the cuts retroactively. But the whole process will lead to "extraordinary complications," Hartle said: At some point, many will need to make financial aid awards, and if funding levels are still uncertain, it will be "a headache in the student aid program."