Sequestration impacts Garden City Community College

3/13/2013

Sequestration is a word that has invaded our every-day language, just as "fiscal cliff" did a few months ago.

Sequestration is a word that has invaded our every-day language, just as "fiscal cliff" did a few months ago.

To sequester means "to seize especially by a writ of sequestration," according to Merriam-Webster. Sequestration is authorized by Congress in the Budget Control Act of August 2011, which also is known as the debt ceiling compromise. The act mandates automatic across-the-board budget cuts, or sequestration, if Congress fails to act to reduce the federal deficit by $1.2 trillion over the next decade.

As you know, Congress did not pass the required deficit reduction package, so sequestration has been triggered. The original implementation for the sequestration was Jan. 2, but it was delayed until March 1. Now, Congress must enact government-wide appropriations legislation by March 27 to avoid an overall shutdown.

So, now we know the meaning of the word sequestration, but what does it mean to us?

The sequester cuts domestic discretionary spending by about 5 percent this fiscal year, which runs Oct. 1, 2012, through Sept. 30, 2013. The sequester cuts discretionary spending across-the-board by $109.3 billion a year from 2014 to 2021 and $85.4 billion in 2013. But no programs are actually eliminated. The effect is to reduce the scale and scope of existing programs rather than to zero out any of them.

First, the good news:

Pell grants are exempt from the sequester this year.

The cuts are a reduction of increased spending, not the reduction of the core budget.

Most U.S. Department of Education student aid and grant programs will be affected by the sequester. These include the Supplemental Educational Opportunity Grants (SEOG), Federal Work Study, TRIO, Gear Up, Title III-A, Hispanic-serving institutions, predominantly black institutions and others. The U.S. Department of Labor also will lose some funding for the Workforce Investment Act and the Advanced Technological Education program.

Because of sequestration, the National Association of Student Financial Aid Administrators and GCCC Financial Aid Director Kathy Blau estimate the following affects for GCCC financial aid in the 2013-14 academic year:

*Supplemental Educational Opportunity Grants:¬ 2013-14 tentative funding notice of $40,588 will be cut to $39,057 (does not include GCCC's 25 percent match to the program.), which is still $1,608 higher than the $37,449 that GCCC was awarded for 2012-13. It also is $1,638 more than the level of funding in the past 11 other years.

*Federal Work Study:¬ the NASFAA 2013-14 prediction list did not show any decrease for GCCC in FWS, which has a funding level of $60,931 (does not include GCCC's 25 percent match to the program.).

* Pell: The Pell grant funding is protected at least for the 2013-14 award year when the maximum annual award is actually increased from the current $5,550 per year to $5,645. This amount accounts for nearly $3 million annually to GCCC students.

*Loans:¬ Annual amounts for students are supposed to stay the same at each grade level, but effective March 1, the origination fee for Stafford student loans increased from 1 percent to 1.05 percent, and the origination fee on PLUS (parent loans for undergraduate students) increased from 4 percent to 4.20 percent.

"For our dependent students who borrow their maximum grade level amounts, the net result is about $3 less each year in loan proceeds disbursed," Blau said.

Other GCCC programs affected by the sequestration are Student Support Services and Educational Talent Search, which are both TRiO programs. The effects on Adult Basic Education Act and Carl D. Perkins Vocational and Applied Technology Act would be delayed because their award year begins July 1.

While we wait to see how Congress handles sequestration, GCCC staff is determining which programs, students and prospective students the sequestration will affect and considering plans to lessen the impact.

The college is preparing 2013-14 award letters to include clarification that amounts for grants, Federal Work Study and loan origination fees may change depending upon federal funding. And GCCC will send amended award letters if necessary once 2013-14 allocations have been determined.

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