Sequestration cuts tuition funds
Potential Impact to the U:
- Estimated federal research loss: $38 million
- Estimated work-study loss: $100,000
- Loss of number of students who receive Pell grants: 8,000, $30 million
- Total federal loss: $85 billion
- National Institute of Health loss: $1.5 billion
- National Science Institute loss: $286 million
On Friday, President Barack Obama signed an order that authorized sequestration, a process that will cut $85 billion from the $3.7 trillion in yearly federal spending between now and Oct. 1. Despite assurances that safety net programs such as Social Security and Medicaid will not be touched, sequestration has the potential to be damaging for research options and for students in need of federal assistance to fund rising tuition rates.
“At this early stage there’s not much that we can do except keep a close eye on the situation,” said Cathy Anderson, senior vice president of student affairs. “We have kind of a ‘wait and see’ attitude. I think everybody is watching this very closely. We don’t know anything for certain yet, but the two areas of main concern are federal research grants and federal student financial aid.”
As the flagship research institution in Utah, the U’s reputation and financing are dependent on receiving the proper funding from either internal profits, donations, or state and federal funds.
Anderson said the majority of the U’s federal research grants come from the National Institute of Health and the National Science Foundation.
According to reports from American Council on Education, the NIH will have $1.5 billion cut from its budget, and the NSF $286 million, boding ill for the health and science, technology, engineering and mathematics fields for which the U has been receiving praise in recent years.
Only two years ago, federal stimulus funds from the American Reinvestment and Recovery Act provided $82.2 million in U grants. That number was halved to $42.1 million in 2011, and dropped again in 2012. Numbers are difficult to pin down so early in the sequestration stages, but Utah’s Board of Regents Director Dave Buhler estimates the research grant loss could be upward of $38 million.
For financial aid, the number of options available have seen a similar state of plummet. The U’s financial aid director John Curl said these are only the latest in a series of small dips in funding that have been chipping away to add up to a sizable obstacle for students.
“It piles up — at some point it has a cumulative affect,” Curl said. “They’re only part of a long list of recent cutbacks in financial aid. There was a combination grant/financial aid program called LEAP that was discontinued. The federal government no longer funds the Perkins loan program, [and] the ECG grant and the SMART grant were discontinued.”
Now that the White House has ordered sequestration, Curl said that financial aid at the U will be set back again.
“We’ll lose about $100,000 in combined FSEO [Federal Supplemental Educational Opportunity Grant] and work-study programs,” Curl said in regard to the estimated amount the U will lose in federal programs. “What that means is we can either limit the number of awards or the award amount.”
For the 400 students who receive work study, Curl said the inability to receive the federal program might not be too large an issue, since employment will simply shift off campus. Combined with the cutbacks in Pell grants, however, the dip in FSEO and work study following the rash of decreased federal aid options could have far-reaching consequences.
“A good way to say that someone has significant need for federal aid is to see if they’re eligible for Pell grants,” Curl said. “At the U, we have 8,000 students who receive those federal grants.”
The Pell grant program will not be touched for another year as per federal mandate, but when it is, Curl said he is afraid it could be another straw on an overburdened camel’s back. He said the U typically gets about $30 million in Pell grant money, and the students who receive that money are in no position to deal with Pell cutbacks in addition to what he believes to be rather predatory federal lending programs.
“The cost for students to take out loans has increased,” Curl said. “They pay 6.8 percent interest, but the government borrows at less than 1 percent. That seems to me a bit out of step. Throughout the whole process of determining aid, I’m not sure the student has been the focus.”
The students are certainly not the focus where primary and secondary Utah education is concerned. Sequestration will trim $6.2 million of meat off the chronically underfunded Utah education system.
Nationally, the U’s concern that sequestration will negatively impact universities has become a pervasive fear since before the order was signed on Friday. Research universities across the nation have been releasing data similar to the U’s.
In a letter to the Washington Post, University of Maryland President Wallace Loh expressed the same apprehension about affecting low-income students and research options. The University of Kansas reported that sequestration will directly cut 450 students from receiving federal aid and work study.
Like the U, the schools express the budget cuts are not certain just yet and must simply close their eyes, cross their fingers and hope that the worst of the sequestration storm will be forgiving.