Recent Sequester may impact students sooner than expected
March 31, 2013
Filed under News
On March 1 President Barak Obama signed the sequestration into law, the $85 billion automatic federal spending reduction plan which will slash roughly $86 million from student financial aid.
This may lead to uncertainty among Bucks students, many of which already struggle to pay for a college education. For the academic year of 2011-12 the total amount of financial aid paid out to Bucks students was $21.8 million, according to Bucks’ 2012 annual board report.
The across the board cuts, best known as the debt ceiling compromise, was passed as the Budget Control Act of 2011 by Congress as an incentive for the Joint Select Committee on Deficit Reduction to cut $1.5 trillion off the budget over 10 years, according to the Washington Post. Even after the delay of the original Dec. 23 deadline, congress and the administration were still unable to come to an agreement.
Students who are impacted most by these cuts will be ones applying for financial aid and school loans after March 1. The cuts will force students to find financial aid in the form of school loans, further increasing the amount of student debt in the U.S.
As of 2011, “total outstanding (student) loans exceeded $1 trillion,” according to Forbes Magazine.
Fortunately, Pell grants have been exempt from the cuts. However, the Federal Work Study program and the Federal Supplemental Educational Opportunity Grant will be affected by the cuts, according to the Department of Education.
Bucks will remain unaffected by the $86 million cut, said Donna M. Wilkoski, Director of Financial Aid. “I do not think (the sequestration) will affect enrollment for the fall semester,” Wiloski said.
Projections from the National Association of Student Financial Aid Administrators show the college has received no reductions in federal allocations for student aid in the coming 2014 fiscal year.
This should come as a wave of relief for Bucks students, since 25 percent of students who attended the two-year school in 2012 received some form of financial aid, according to the annual board report. Furthermore, the report for 2012 showed 52 percent of Bucks students who applied for financial aid received it.
While Bucks students have their own unique financial standings, many rely on their allotted amount of aid provided to them by these programs.
“Even though it is little, it helps with my financial needs,” said Donald Lam, 19, chemistry major at Bucks.
Bucks students will face increased direct subsidized and direct unsubsidized loans as well direct plus loans. Fees will increase from 1 percent to 1.05 percent and from 4 percent to 4.2 percent, respectively, according to Wilkoski. These increases will take effect March 1.
Yet, most students across the state will feel some type of pain because of the cuts. Pennsylvania primary and secondary education will lose out on $26.4 million with 90 schools losing funding entirely. As many as 360 aid and teaching jobs will also be at risk which may result in a decrease of up to 29,000 students being served, according to estimates released by the White House.
Unfortunately, House Republicans and Democrats are still miles apart on an agreement. Many Republicans have continued to call for no tax increases, no defense cuts and considerable domestic spending reductions while Democrats have requested a mix of taxes increases and spending cuts spread over a decade rather than falling entirely in 2013, according to the Washington Post.