College & Workforce Readiness

Glimpse of Potential Cuts for Higher Ed. If Deficit Deal Fails

By Caralee J. Adams — September 17, 2012 1 min read
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Just how badly could higher education be hit if Congress doesn’t come to a long-term agreement on the deficit by the end of the year?

A report released Friday by the White House’s Office of Management and Budget gives an estimate of how federal spending programs would fare under the cuts to be triggered in the absence of a deal. For many higher education programs, which are considered domestic discretionary spending, the funding cuts would be 8.2 percent, according to the OMB estimates. Mandatory spending programs, such as the College Access Challenge Grant, work study, and other federal financial aid programs, would be cut by 7.6 percent.

Low-income students who rely on Pell Grants would not be affected — the program would be protected from the cuts during fiscal year 2013. However, student loan origination fees would increase.

Last year, the congressional deal to raise the debt-ceiling included a requirement that a bipartisan committee agree on a financial long-term plan or mandatory cuts would kick in. Last fall, the committee failed to come to a consensus, leaving potential $1.4 trillion across-the-board cuts looming.

For a full picture of how impact of the sequestration cuts, see Politics K-12.

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A version of this news article first appeared in the College Bound blog.