After the deadline for sweeping spending cuts as part of the “fiscal cliff” was pushed from Jan. 1 to March 1, U.S. Secretary of Education Arne Duncan said the 10-percent, across-the-board cuts will cause dramatic harm to institutes of higher learning.
The automatic spending cuts, referred to as sequestration, are considered major issues at Boston University, as they might affect financial aid and work-study programs, BU officials said.
“It’s really troubling to us,” said Jennifer Grodsky, vice president for BU Federal Relations in D.C. “No matter what happens, we have a tremendous financial aid office that thinks a lot about how to communicate with students and parents on what is their best option.”
After months of deliberation, Congress partially avoided the fiscal cliff by passing The American Taxpayer Relief Act of 2012 on the Jan. 1 deadline, but the sequestration deadline remains and was pushed to March 1.
Education officials advocated for avoiding the sequestration cuts in late 2012, as the cuts pose a significant threat to research funding.
Duncan, who delivered a speech Thursday in front of a Senate committee devoted to the topic on Capitol Hill, said sequestration would cut $49 million from the federal work-study program and cut Federal Supplemental Educational Opportunity Grants by $37 million.
If the government does not avoid the March 1 cuts, the federal work-study program will need to eliminate about 33,000 students, Duncan said in his speech. With the cuts made to FSEOGs, approximately 71,000 students will be affected.
Duncan also said the Free Applications for Federal Student Aid would also be affected and would in turn affect millions of students during the college application process as they decide where to attend school.
“A cut to Student Aid Administration could affect the processing of the [FAFSA], which millions of students and families use,” he said in his speech. “This could mean that many students would not receive financial aid determinations and awards in time to make enrollment decisions.”
Officials for U.S. President Barack Obama’s administration, Duncan said, believe a sequestration of this magnitude would be extremely harmful for all U.S. citizens in addition to students.
“This should not come as a surprise, because sequestration, by design, is bad policy,” he said in his speech. “The resulting deep cuts carry the very real threat of significant harm to the ongoing economic recovery and our current and future competitiveness in the global economy.”
Duncan also said the long-term impact of sequestration would have a devastating effect on the future workforce.
“The long-term impact of sequestration could be even more damaging, as it would jeopardize our nation’s ability to develop and support an educated, skilled workforce that can compete in the global economy,” he said.
Duncan also said due to cuts in the contracts to organizations that service federal student loans, state departments might struggle collecting student debt and providing service to student borrowers after graduation in the future.
BU spokesman Colin Riley said the sequestration would create significant problems for students and schools alike.
“It would be a major issue for those individuals who would be negatively affected,” Riley said. “Of course the institution, because it may have a negative impact on the ability of certain students to enroll, it would affect affordability and when you affect affordability you affect accessibility.”
Riley said the most drastic effects the budget cuts could have on BU would be the decrease of funding for research, which would negatively affect students and the school as a whole.
“I don’t know what that means in the short term, but hopefully if it does go through and it takes effect they [Capitol Hill] are able to address it in short order, and Congress and the President can work together to solve this particular situation,” Riley said.
Grodsky said while the impending sequestration poses financial issues for BU, it is comforting that Federal Pell Grants are exempt from the cuts.
“Duncan talked about the fact that Pell Grants … are protected under the sequestration,” she said. “That’s really important to us. We have a lot of students at BU, I think it’s around 14 percent, who utilize Pell Grant funding.”
Riley said BU is making an effort to advocate against spending cuts as a member of the higher education community.
“The university is concerned and, through the associations that it’s a member of, has made its position known,” Riley said. “[They] have reached out to representatives in Congress, so yes, we’re concerned and we’re waiting on that.”