Yesterday evening the Senate passed the Bipartisan Budget Act of 2013 by a vote of 64 to 36. The deal, announced last week by Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wis.) would set spending at $1.012 trillion for fiscal year (FY) 2014 and partially replace scheduled sequestration cuts for FYs 2014 and 2015. The House passed the deal last week by a vote of 332 to 94 and it will now go to President Obama's desk, where he is expected to sign it into law.
The deal would provide $23 billion in deficit reduction and $65 billion in sequester relief for FY 2014 and FY 2015 through a series of offsets. Offsets related to federal student aid include:
As a reminder, sequestration is a 10-year deficit reduction measure that went into effect March 1, 2013, designed to achieve nearly $1 trillion in deficit reduction over a decade. Last year, sequestration impacted FWS, SEOG, TRIO, GEAR UP, TEACH, and origination fees. The cuts in the first year of sequestration were implemented in an across-the-board manner, while cuts in years 2-10 are scheduled to occur through lower allocations to each appropriations subcommittee. This new deal will effectively "replace" a portion of the cuts scheduled to occur in the next two fiscal years.
At this point it is unclear exactly how this deal will impact future student aid funding, as appropriators must now decide how the money is allocated. However, the deal will likely ensure that no further cuts will be made to the student aid programs. It is also likely that this new deal will allow the Pell Grant to be funded at the maximum amount for award year 2014-15.
NASFAA has joined the higher education community by signing onto letters of support for the deal sent over the past week to the House and Senate, as it restores a significant portion of funds to the Labor, Health, Human Services and Education appropriations subcommittee.
NASFAA will provide more details as they become known.
Publication Date: 12/19/2013