A couple of months ago, the hot topic of conversation was the Fiscal Cliff. It was much discussed, even though most people didnm’t know exactly what it was, just that it was bad. Well, the Fiscal Cliff was postponed for two months, but then came back and we fell off the edge of it, and everyone is still okay. Now we have entered the next phase of governmental trouble, called the Sequester.
So the questions for todays blog are simple enough – what exactly is the Sequester, and how will effect education?
Sequestration is a budgetary procedure used in government, which places a hard cap on governmental spending. It is put in place to limit the amount of money the government can spend, to keep the federal budget from becoming too excessive. Once the limits are breached and sequestration begins, across the board cuts begin immediately — they are imposed on all programs and all departments that are not essential. This doesn’t mean the money stops, just that it cut back by a certain percentage.
In this sequester, the magic number is 8.2%. All discretionary spending not related to defense was cut by eight point two percent. If that number seems small, just consider that its 8.2% of hundred of billions of dollars.
So how does this affect you as a student? That depends – work study students and students depending on government grants will take the biggest hit, but some students may not feel the pinch at all.
TRIO is a group of eight federal outreach programs intended for “students with disadvantaged backgrounds.” It includes Upward Bound, Veterans Upward Bound, Talent Search, and Student Support Services, among others. All will be cut.
GEAR UP (Gaining Early Awareness and Readiness for Undergraduate Programs) is another outreach and scholarship program funded by the federal government. It will also be cut.
Federal work study grants,to help lower income students pay for school, will be cut by forty nine million dollars. This will affect roughly seventy thousand students.
Supplemental education grants, which are provided for undergad students who have displayed “exceptional need” will be cut by thirty seven million dollars.
Pell Grants are protected from cuts this year, but after 2013 they will be on the chopping block to be affected by future sequesters, should they be enacted.
Origination fees for federal student loans will also increase dramatically. Stafford loans, both subsidized and unsubsidized, formerly had an origination fee of 1%, and PLUS loans were 4%. Both of those fees will increase by over seven percent. This means it will cost more money for a student to borrow money for their education.
If you haven’t noticed the trend, all of these cuts will affect the students who need them most. Students who can afford college through private financing or from their own pocket will not feel the sequester hit them quite so hard. But for low income student who need to the help, the help will be harder to get.