Report: Most Colleges Not Hit Hard by Sequester
- Budgets proposed for rest of 2013 and 2014 fiscal years
- Effects of sequestration are already felt at colleges and universities
- Sequester would hit higher education programs hard
- Moody's report shows diminished pricing power for colleges
- As Congress negotiates budget, new survey highlights strain of sequester cuts on university research
Most universities will face only minimal effects from the automatic budget cuts that went into effect at the beginning of the month, according to a report released Thursday by Moody's Investors Service. The report looked at the projected financial effect of the 5 percent cuts to domestic discretionary spending, known as sequestration, and found that only 1 percent of colleges and not-for-profits stood to lose more than 3 percent of their annual revenue as the result of the cuts.
Research universities were most likely to be hit hard by the cuts because federal funding for scientific research is one of the areas affected. While some financial aid programs -- particularly federal work-study and the Supplemental Educational Opportunity Grant -- will also be cut, the Pell Grant, bedrock of need-based financial aid programs, is safe for the 2013-14 academic year.