Mariella Roque/ Staff Writer
Now that the nationally discussed sequester is no longer an abstract idea, the parties affected have to deal with the fallout, including university students receiving financial aid.
A series of federal spending cuts went into immediate effect on March 1, passed by Congress and signed into law by President Barack Obama in 2011 as the Budget Control Act, having failed as a means to force a more balanced, bipartisan, spending cut agreement.
The sequestration produces automatic cuts for each of nine years, totaling $1.2 trillion.
One of the areas affected by the sequester is student financial aid, including federal grants and loans.
The National Association of Student Financial Aid Administrators calculated what universities could expect to see as a result of sequestration.
NASFAA found that the Federal Supplement Educational Opportunity Grant, offered exclusively to Pell Grant recipients, would see an $85,000 cut, effective immediately. According to Director of Financial Aid Francisco Valines, this would mean 100 less students receiving the FSEOG.
“About 100 students—who would’ve gotten it, might’ve gotten it—aren’t going to be able to get the FSEOG,” said Valines. “We’re going to have about 100 less awards to make.”
NASFAA also found that federal work-study would also receive a hit— a cut of about $142,000, meaning 50 less students will be selected for work-study opportunities.
“Anything that’s going to take away from students is important,” said Dean Williams, founding chairman of FIUnite. “The sequester limits the funding for low-income students who rely on grants and end up staying at school an extra two years because they can’t get funding.”
Williams issued a statement explaining that sequestration would result in approximately $140 million being slashed from the U.S. Department of Education’s Office of Student Financial Assistance.
“Students who rely exclusively on grants will be punished for trying to better themselves instead of getting rewarded for their hard efforts,” said political science alumni Ed Vega. “Congress is sending us a message that hard work doesn’t actually pay off.”
Another type of financial aid affected immediately by sequestration would be the loan origination fee, a processing fee charged to the borrower initially when taking out a loan. The Stafford loans would see an increase of 0.053 percent in the fee and for Plus loans, the increase would be 0.2 percent. According to Valines, about 20,000 students at the University take up a Stafford or Plus loan.
“It’s not a lot, but every dollar counts for students,” Valines said.
Valines warned of Pell Grant amounts potentially going down in the coming years, as well.
“What we know is that Pell Grants are only protected for this and next year, so for the 2014-2015 school year, Pell Grants are up for grabs if Congress doesn’t do anything,” Valines said.
Political science senior Anthony Maneiro felt that these cuts would help drive down tuition prices, which have increased for Florida universities in the past year.
“The prospect of guaranteed money from the federal government through grants and low-interest loans has driven the cost of education up almost single-handedly,” said Maneiro. “Maybe the threat of cutting federal aid will keep tuition prices from rising so much.”