Originally published February 27, 2013 in The Commonwealth Times
Assistant News Editor
VCU students could have a harder time getting financial aid or finding work study jobs next year if Congress doesn’t stop the upcoming sequestration before March 1.
In a statement released on Monday, VCU President Michael Rao outlined his concerns about the possible sequester and its potential effects on the university, which is funded by federal and state funds and private donations.
“At a time when resources for higher education around the nation are already limited, and the state and national economies remain uncertain, sequestration must be avoided,” Rao said in the release.
Sequester, the term for sweeping budget cuts instead of focused cuts to specific programs, was part of the deal Obama and Congress made to raise the debt ceiling in 2011. It was meant to encourage negotiation and cut federal budget deficits by $1.2 trillion over the next 10 years unless a compromise could be made.
Sequestration would mean mandatory cuts to all executive agencies including the Department of Defense, the Department of Education and the National Institutes of Health, which all have major ties to Virginia, VCU and MCV.
Rao highlighted areas that will be impacted if a deal is not reached by Friday, like VCU’s dependence on federal research dollars and available financial aid to students.
According to Rao’s statement, VCU could lose $21 million by the end of September, as the National Institutes of Health faces major cuts that contribute to many of VCU’s current research projects and the VCU Massey Cancer Center, which is partially funded by NIH.
Sequestration will also adversely affect the Federal Work Study Program which would mean 2,120 fewer eligible students would be able to be part of the program. The Federal Supplemental Educational Opportunity Grant project, which provides need-based grants to students with the lowest Expected Family Contributions on their Free Application for Federal Student Aid (FAFSA), would also be cut by almost 33 percent according to Rao’s statement.
“(Colleges and universities) have received very little guidance as to how the cuts would be made,” said Alan Edwards, director of policy studies at the State Council of Higher Education for Virginia. “In terms of research funds across the state (the cuts) could be in the $30 million range. But without any guidance, it could be significantly more than that. As Michael Rao says, it could be $21 million just at VCU.”
Reductions in federal aid will impact the university’s decisions on allocating aid to students.
“Each institution puts together an aid package for their students,” Edwards said. “As the amount they are getting from the federal government goes down (it) will impact how they allocate the monies they have.”
Some states are taking preemptive steps to soften the blow of the possible budgetary reductions.
“Some institutions across the country have been budgeting very conservatively for the spring semester, not making hiring decisions, not buying equipment … In some ways it’s already having an impact,” Edwards said.
But the sequester is not the only looming federal issue. Part of the deal over the fiscal cliff last year was to reduce federal spending by $4 billion and reduce its spending caps for fiscal year 2013, Edwards said.
“So even if something miraculous happens in the next couple of days … there’s still no federal budget,” he said.
According to Edwards, colleges and universities will be thrown into a state of budget limbo through the month of March because they are not sure where the cuts will be or how much, even if there is no sequester.
“There will be impacts, sequester or not, but what the numbers are nobody knows,” he said.
VCU political science professor John Aughenbaugh said it is very likely the sequester will happen Friday.
“The only question is how many months do we operate under the sequester before Congress and the White House actually strike a deal,” he said.
“Both parties and both political branches thought that sequester would be a big enough threat that there would be negotiations and more specific decisions on how to cut the budget,” Aughenbaugh said.
The last time the U.S. saw a sequester was in 1986 when a Democrat-controlled Congress and Republican President Ronald Reagan could not come to an agreement on solving budget deficits.
“It’s not the smart way to go about budgeting … it’s a nuclear option,” Aughenbaugh said.
He said Virginia in particular will be hurt because of its direct relationship with the federal government.
“In a state like Virginia or a state like Maryland, where so many of our citizens work directly for the (federal government), it has a multiplier (effect),” Aughenbaugh said.
A report released from the White House on Sunday and published by The Washington Post found that Virginia could lose roughly $14 million in education funds, limiting teacher jobs and funding for some schools and programs at all levels. Some of the cuts that will be felt nationwide include spending on work study jobs in higher education, Head Start programs, military spending, public health funds and job search assistance programs.
The report was meant to encourage Republicans in Congress to engage before the sequester goes into effect, according to The Washington Post.