After a long, expensive, and closely watched election season, the overall makeup of the United States government hasn’t changed much. Barack Obama is still President, the Senate is still controlled by the Democrats, and the House of Representatives still holds a Republican majority.
So, what does this mean for higher education during
the next year?
The most pressing issue for higher education and the nation is the “Fiscal Cliff” that is looming at the end of 2012. Unless Congress reaches a compromise, on January 1, 2013 a number of laws will go into effect to slash the deficit by cutting funding to government programs, reducing defense spending, and ending Bush-era tax cuts. If these measures are enacted, they would serve to cut the deficit by a huge amount but at a great risk to the fragile US economy. For education, it would result in an across-the-board 8.2% funding cut.
Federal financial aid also faces problems. In July of 2013, the interest rate for federally subsidized student loans will double to a rate of 6.8%, making college funding less affordable for needy students. Three months after that, federal Pell Grants face a budget shortfall. The silver lining of this budget shortfall is that Obama’s budget is the lesser of two evils; Paul Ryan’s proposed budget would have nearly tripled the shortfall while Obama’s budget minimized the effects. Additionally, Obama will need to start the process of renewing the Higher Education Act, the law that governs federal financial aid.
There is one big uncertainty in President Obama’s plans for higher education. Is it possible for him to deliver on his promise to decrease the rate of tuition growth by half in the next decade? Last September, Obama proposed a plan that would encourage cost cutting at public colleges and universities. In this plan, schools that reduce costs most successfully would be rewarded with increased federal funding. However, this measure is controversial and may be met with fierce opposition from the Republicans and the House of Representatives.
With the status quo preserved, it is difficult to predict what is in store for higher education during the next year, let alone the next four years! Moving forward, it is likely that Congress will be facing some fierce budget debates, financial aid budget changes, and further gridlock along party lines. We’ll be keeping our eyes on the headlines to help keep you informed!