How the fiscal cliff would impact CSU

It’s been talked about at length for over a year now, but with less than four weeks until the nation possibly goes over the fiscal cliff, Congress still appears to be no closer to reaching a budget agreement than they were last August, when a committee was charged with crafting a budget deal.

The committee failed and if legislators can’t reach a compromise by the end of the month, approximately $500 billion in automatic federal spending cuts and tax increases will be implemented.

Lower and middle income higher education students will be impacted more than other groups.

According to the State Association of National of State Student Aid Grant & Aid Programs, “If Congress does not act, the cost of attending college will increase by about $5,000, per student, per year, starting with the 2013-14 academic year, for many low and middle income families — and that’s before taking into account any increases in tuition, fees and other costs of attendance.”

The key question administration officials at CSU asked about the fiscal cliff is what would happen to the federal Pell Grant program, said Tom Biedscheid, interim director of Student Financial Services.

“Pell is an integral part of our Commitment to Colorado,” Biedscheid said, referencing one of CSU’s college affordability program for students who come from middle- and lower-income families. “Any loss in Pell, any change in Pell, can have a major impact to the institution. So we keep a close eye on that.”

CSU students received $22 million out of $33.4 billion in Pell Grants that were distributed nationally in the 2011-12 school year. Most government agencies and programs would see an across the board cut of 8.2 percent.

The good news: Federal Pell Grants will still be fully funded through the 2013-14 school year, so any reductions in the program wouldn’t occur until the 2014-15 school year.

The bad news: If sequestration is still in effect in 2014, then the Pell Grant program would get hit especially hard, with a projected $6 to $9 billion shortfall the first year.

Other programs impacted at CSU would be:

  • Federal Work-Study decrease from $923,000 to $847,314. That equates to about 31 jobs.
  • Federal Supplemental Educational Opportunity Grant decrease from $632,000 to $580,176. This grant is used to supplement very low income freshmen aid packages.
  • Other programs administered by the Access Center like TRIO and GEAR UP would also see an 8.2 percent cut.

Despite these cuts, Biedscheid said enrollment at CSU probably wouldn’t drop the first year, because the Commitment to Colorado ensure access to Pell-eligible students. If there’s still sequestration after a year, lower-income students might have more difficulties in attending a public university.

“If Pell does take a hit, maintaining the Commitment to Colorado becomes difficult because any loss in federal funding to the Commitment to Colorado would have to be backed by institutional money,” Biedscheid said. “So there is that long term concern.”

Cynthia Santos, a senior psychology and spanish double major, works 12 to 14 hours a week in her work study job at the student identification center. She said the work study program is perfect because her employers are understanding of the stresses students have and are willing to accommodate them, like with finals week.

She said she works another job and sends money back home to help out her parents. She expressed concern about 31 work study positions being eliminated if an agreement isn’t reached.

“That would be so hard and stressful if they took that away from us,” Santos said. “They make it easier and give you more breaks than a regular job.”

Although it’s hard to gauge how much money CSU would lose from the federal government, the impact to research would be significant, said Bill Farland, the vice president of research at CSU.

Seventy-six percent of the $340 million in research funding CSU receives comes from the federal government. Farland estimated that the university would see research funding decrease by about $23.5 million, with the drop coming about a year after the fiscal cliff.

“That’s a pretty significant impact if it were to come about,” Farland said.

The across-the-board cuts would mean all universities and the federal agencies that support them with research funding would be hit hard by the cuts, meaning there would be significantly less money for research and a marked increase in competition for the remaining federal research dollars.

“Our investigators have been very successful in terms of their ability to get funds in a tough budget climate.This would be an additional reduction of funding for competitive programs,” Farland said. “It would have an impact on our ability to compete and garner those awards.”

Those awards, Farland said, support faculty salaries, research associates, graduate and post-doctoral researchers, among other things. Although he doubted faculty would be cut, there could be a “ripple” effect into other research infrastructure.

A few weeks ago, Farland spent time with the members of the Colorado Congressional delegation and discussed the importance of higher education and research to keep the country vibrant and competitive. They also talked about contingency plans in case the nation were to fall off the fiscal cliff and how to continue working with federal agencies to ensure funding.

“If we do see these kinds of potential reductions, we have to work with the agencies to try to protect the programs that are most important to us,” Farland said. “Who knows if we’ll be successful. But we’ll certainly give that a try.”

Senior Reporter Austin Briggs and Student Life Beat Reporter Kate Simmons can be reached at news@collegian.com.