The Budget Cuts to Come

If Congress does not agree on a long-term plan to reduce the deficit by the end of the year, most higher education programs will face deep cuts in the mandatory spending reductions that go into effect Jan. 1, according to a report released Friday by the White House’s Office of Management and Budget.

For months, advocates for education funding (as well as those concerned about other budget areas) have braced for the cuts, known as sequestration. When Congress made a last-minute deal to raise the debt ceiling last year, the cuts were set to take place as a threat to drive a long-term agreement to sort out the nation’s finances: either a bipartisan committee would agree on budget cuts, or $1.4 trillion in mandatory cuts would kick in. In November, the committee announced it could not reach an agreement.

Friday’s report is the first look at how, exactly, those cuts would be distributed among domestic programs. And for many higher education programs, the outlook isn’t good: an 8.2 percent across-the-board program cut for domestic discretionary programs, which make up most of the higher education budget, and a 7.6 percent cut for mandatory spending programs. While the Pell Grant is protected from the cuts during fiscal year 2013, as is the College Access Challenge Grant, other federal financial aid programs would be cut by 7.6 percent across the board, including the Supplemental Educational Opportunity Grant and federal work-study. Student loan origination fees would also increase.

The federal programs whose grants sustain university research — the National Science Foundation and the National Institutes of Health, as well as the National Endowment for the Humanities — would see the same across-the-board 7.6 percent cut to mandatory spending and 8.2 percent to discretionary spending.

Federal college access programs, such as TRIO and GEAR UP, would also see a 8.2 percent cut. <Read more.>

Via Libby A. Nelson, Inside Higher Ed.

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