Sequestration

Hello SCASFAA,

I am writing to give you a few quick points about what may happen with sequestration.

What is sequestration?
A mandatory across-the-board cut to the Federal budget.  It is occuring because there are been a failure by congress to pass a deficit reduction deal and/or balanced budget.  As a result many programs will see a 5.1% budget cut this year.

When does this happen?
Friday.  Starting March 1st this goes into effect, and continues for 10 years.  It immediatley affects funding allocations for 2013-2014.  Official notifications will occur on or after July 1st for the coming fiscal year.

What is affected?
A number of education related programs will be affected. 
The following programs will see a 5.1% reduction:
     Federal Supplemental Educational Opportunity Grant (FSEOG)
    Federal Work Study (FWS)
    TRIO
    Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP)
    Graduate Assistance in Areas of National Need (GANN).
NASFAA has published an estimated adjusted allocations chart based on these figures.
Loan fees are expected to rise:
     Stafford from 1.00 to 1.053 percent
     PLUS from 4.00 to 4.212 percent
Pell Grants will remain unaffected for 2013-2014, but future years will be affected.

Can Sequestration be stopped?
Yes, if Congress can pass a deficit reduction deal before Friday.  Even if they don't, though, they will be able to resolve it after March 1st with a similar deal.    That said, whatever deal occurs we should be prepared for some sort of funding reductions.

I hope this offers some insight.  I make no guarantees that this is the "entire story" or that my information is 100% accurate. 

Thank you,

Ken Cole
Peer Support Chair 2012-2013