Deadline looms for major higher education cuts

The higher education sector in the United States may experience a fiscal blow in the new year of across-the-board cuts to federal domestic programmes, including many that are related to higher education, if Congress fails to strike a deal by the end of the year to reduce the deficit.

The automatic cuts, known as sequestration, were established last year as part of the Budget Control Act, which requires cuts of $109 billion a year for the next nine years.

A 394-page report from the White House’s office of management and budget, released on 14 September, offers a preliminary glimpse of where the cuts would be applied. It presents a grim scenario for higher education: discretionary programmes will see across-the-board cuts of 8.2% and mandatory programmes cuts of 7.2% from their 2012 fiscal year funding levels.

Low-income students will likely feel the immediate effects most starkly.

Although some key funding streams, like Pell grants, will be exempt from the cuts, many financial aid packages will see 8.2% reductions, including work-study funds and the Supplemental Educational Opportunity Grants, both of which would fall to pre-2000 levels.

"The potential for sequestration will not only undermine our national completion goals, but it will disrupt federal programmes such as TRIO and GEAR Up that serve our nation's most needy students,” Michelle Asha Cooper, president of the Institute for Higher Education Policy, told University World News.

“We encourage Congress to find long-term solutions that don't directly conflict with America's education priorities, as well as our nation's global competitiveness."

Research institutions such as the National Institutes of Health (NIH) and the National Science Foundation would fall victim to the same cuts. That means the NIH, for instance, would lose more than $2.5 billion in funding.

Patrick Callan from the Higher Education Policy Institute said cutting research funding is detrimental to the country’s economic success.

“Research cuts that would be taken by institutions like the National Science Foundation; those would certainly be painful. But probably more consequential is it would undercut the national research effort in important scientific areas,” Callan said.

During last year’s debt ceiling deal, Democrats and Republicans gave themselves until late November to reach an agreement on how to reduce the deficit. As an incentive for lawmakers to strike a deal, automatic across-the-board cuts were to be enacted if the deadline passed without their doing so.

After lengthy partisan bickering, Congress didn’t manage to reach an agreement. But then Congress was given a grace period: the cuts wouldn’t take effect until January 2013, giving lawmakers more than a year to rectify the situation and reach an agreement.

Now, with only three months to go, Congress is running out of time to prevent sequestration – bad news for the higher education sector.

The potential cuts come at an already bleak time. Cutbacks in federal and state funding over the past few years have led to a severe funding crisis in the higher education sector. In California, for example, the state has cut more than $1.5 billion from its public universities since 2008, and more may still be in the works.

Meanwhile, funding for the 2012-13 fiscal year has already been budgeted, which means Congress will have to take back funds that have already been disbursed, a complex process whose mechanics no one has yet defined.

The report described sequestration as “bad policy” that was never intended to be implemented.

“Sequestration is a blunt and indiscriminate instrument,” said the report. “It is not the responsible way for our nation to achieve deficit reduction.”

While students and universities will feel the immediate effects of the cuts come 2 January 2013, the country as a whole will suffer if the situation isn’t resolved in a timely manner, said Callan.

“The long-term effect would be the damage that would be done to both higher education access to students and also to the national research effort,” he said. “Both are critical to our competitive economic situation.”