Sequestration Cuts: Local Colleges and Universities Lose Federal Funding

Colleges across the country will feel the impact of automatic federal spending cuts — known as the sequester — scheduled for Friday, according to the National Association of Student Financial Aid Administrators.

The organization put out a 116-page report Monday with projections on how much the schools’ Federal Work Study and Federal Supplemental Educational Opportunity Grant programs will be affected, showing some colleges losing tens of millions of dollars in Title IV financial aid funds from the federal government.

The government’s tentative allocation for financial aid programs nationwide is $1.7 trillion, according to the report.

The left three rows of estimates in the chart below are for the Opportunity Grants and the right three rows of estimates are for the Federal Work Study.

The NASFAA compiled the report using U.S. Department of Education data for 2013-14 campus-based allocations and applied a speculative cut of 5.1 percent, showing a decrease of more than $65 million to the financial aid programs, according to the organization. Actual budget reduction figures have not yet been released by the Office of Management and Budget.

According to the Department of Education, the sequester would also have real consequences for teachers, young children in low-income families, and special-needs students.

The Obama administration on Sunday released a detailed report with information on how the sequester would affect each state. According to the report, California schools will lose about $87.6 million in federal funding, putting some 1,210 teachers and aides out of work. Financial aid would no longer be available for 9,600 low-income college students; some 3,690 work-study jobs would be eliminated and 8,200 children would be without early education, according to the White House.

The looming budget cuts were part of a deal struck between the White House and Congress in 2011 on the raising of the national debt limit. Democrats were in favor of voting to raise the debt ceiling, but Republicans wanted spending cuts in return. Sequestration will end in 2021 and is projected to lower the deficit by $1.2 trillion.

Part of President Obama’s plan to reduce the deficit calls for an increase in taxes on the wealthiest 1 percent in addition to spending cuts. Republicans oppose the plan, accusing the president of trying to replace the sequester with a bill that increases the deficit.

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