Sequestration Presents Uncertain Outlook for Students, Researchers, and Job-Seekers

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Congress failed to reach an agreement in time to avert or postpone the automatic, across-the-board federal spending cuts. Higher-education institutions and other groups now are waiting to see exactly how they will be affected.
March 01, 2013

As the midnight-Thursday deadline came and went, steep federal spending cuts were set in motion, leaving college students, administrators, and researchers bracing for the effects of impending reductions in financial-aid, research, and job-training programs. Adding to the anxiety is the fact that no one is certain exactly how or when those effects will be seen.

Advocacy groups, colleges, and President Obama have all called on Congress numerous times to come to a compromise and avoid the across-the-board reduction in federal spending, which will take place through a process known as "sequestration."

Though a handful of last-minute bills were introduced in the days leading up to the March 1 deadline, legislators failed to approve a plan to avert or postpone the cuts in time, and higher-education institutions across the country are now waiting to see exactly how they will be affected.

President Obama is expected to meet with Congressional leaders on Friday to discuss possible ways to avoid the sequester, but that meeting is not expected to halt the first phase of cuts from taking effect.

The White House has warned that there will be significant reductions in some student-aid programs, in federal funds that support university research, and in college-preparatory programs, but it is difficult to nail down the immediate effects, as program administrators are not sure of how and when the administration will put the cuts into effect.

The Student-Aid Recipient

U.S. Education Secretary Arne Duncan warned that the reductions would have a significant impact on both the financing and delivery of federal financial aid for college students. Although the Pell Grant program is exempt from cuts for the first year of sequestration, programs like the Supplemental Educational Opportunity Grant and Federal Work-Study would be cut by millions of dollars, eliminating more than 100,000 students from participation.

But most students won't see the effects of cuts in those programs until July 1, when the financial-aid program year begins. Most colleges send out their financial-aid award letters to students in March and April, but many institutions will have to do so with an asterisk or a caveat until they are notified of new allocations of federal funds from the Department of Education, according to Justin Draeger, president of the National Association of Student Financial Aid Administrators.

Once colleges are notified of exactly how much federal money they will receive for the 2013-14 school year, institutions may need to send students revised financial-aid letters, or determine if they can help fill the gap for students out of their own budgets.

It is disappointing, Mr. Draeger said, to have such financial battles late in the academic year because it creates "an air of uncertainty" for students and their families.

"We leave them scrambling with too many unknowns at a time when they should be narrowing down how much they'll be paying for college," Mr. Draeger said.

Students should keep in close contact with their campus financial-aid offices, he said, to ask if they should expect any reduction in aid.

The University Researcher

The White House has also warned that sequester cuts will force research organizations like the National Institutes of Health and the National Science Foundation to make fewer research-grant awards, which could result in the loss of thousands of jobs for scientists and students.

Universities' research leaders have estimated that federal research spending will be trimmed by more than $12-billion in 2013, and by nearly $95-billion over the next nine years, which they say the economy cannot afford. ScienceWorksforU.S., an awareness project formed by several national university organizations, projected a minimum $203-billion reduction in the country's gross domestic product over the next nine years, and 200,000 fewer jobs per year from 2013 to 2016.

In anticipation of the 5-percent reduction in federal research spending, many federal agencies have already been playing it cautiously by pre-emptively awarding fewer grants, according to J.R. Haywood, the Federation of American Societies for Experimental Biology's vice president for science policy. Many concerned researchers are looking ahead to March 27, by which time Congress must pass an appropriations bill to allow the government to function during the remainder of the 2013 fiscal year.

Fears about sequestration have been compounded by the fact that federal research agencies still don't know what their budgets are for the coming fiscal year. The situation has created a "double whammy" that makes it difficult for agencies to prepare for the future, Mr. Haywood said.

There is a "fear of the unknown" in terms of what researchers may not be able to do as a result of the cuts, Mr. Haywood said. "It's hard for us to project what we're not going to be able to discover."

Additionally, Mr. Haywood said, many people—including workers, faculty members, and average citizens—may have a hard time realizing that the sequester cuts could be in place for the next 10 years, unless Congress acts to change or repeal the law.

"A lot of people probably think the money will be restored and everything will be normal again," Mr. Haywood said. "But we're facing a new normal now."

For researchers who hold or are applying for grants from the National Science Foundation, the agency has said that sequestration is expected to affect mainly the number of new research grants it awards this year. Those are likely to be reduced by about 1,000, Subra Suresh, who is departing this month as the foundation's director, said in a letter posted on the NSF's Web site on Wednesday. The agency will continue to pay grant increments, as scheduled, to recipients of existing grants, he said.

High-School Students

Financial-aid programs for the neediest high-school students will also be harmed. College-preparatory programs like TRIO and Gear Up, which help prepare low-income and minority students for college, will be cut by $42.8-million and $15.4-million, respectively, this year.

Gina Henderson, a first-generation college student at the University of Alabama at Birmingham, participates in the TRIO program. Though she said her ability to pay for college depended heavily on financial aid, Ms. Henderson also relies on TRIO's support services.

Ms. Henderson has a part-time work-study job that limits her free time, and receives additional support in tutoring, mentoring, counseling, and "a home away from home" through the TRIO program. A cut in this and other college-preparatory and support programs, she said, would diminish the future of thousands of students.

"This is just unfair that I worked so hard all these years, and now my dreams could be taken away from me," Ms. Henderson said.

Unemployed Workers

The sequester will cut more than $450-million from federal employment and training programs, which help the unemployed gain necessary skills to re-enter the work force. As a result, nearly two million fewer workers will have access to those services, which are often provided by community colleges, according to a statement from the National Skills Coalition.

But those programs have already lost a significant amount of federal support, according to Rachel Gragg, the coalition's federal-policy director. More than $1-billion has been cut in the last two years. Ms. Gragg said the immediate challenge would be absorbing even more cuts on July 1, when the program year begins.

It's hard to know for sure what consequences additional cuts will have, Ms. Gragg said, because the federal government has not identified how cuts will be distributed and overseen throughout various programs.

But some local organizations the coalition works with have said they may have to lay off staff members, cut back on training services, or close programs or centers altogether.

"Once that capacity is lost, you won't get it back," Ms. Gragg said. If the sequester cuts stay in place for the entire 10 years specified in the legislation, the results would be "catastrophic."

There are already 160,000 people on waiting lists for adult basic-education programs, and Ms. Gragg said the coalition estimates that 10,000 others will lose access to training services under the sequester.

Sequestration, she said, "will have completely dismantled the federal work-force-development system."