What the Debt Ceiling Debate Means for Higher Ed

"At the same time that Congress is trying to keep the federal government from shutting down at the end of this week, it’s also facing a deadline to keep the United States from defaulting on its loans -- a never-before-seen outcome that would impact higher education, and the economy over all, in disastrous but still mostly unknown ways," Inside Higher Ed reports. 

..."At least one outcome seems obvious if Congress doesn’t act: it’s difficult to disburse financial aid if the federal bank account doesn’t have any money in it, said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators. If there are no funds at the Treasury and no way to raise capital, the federal government will become dependent on incoming revenue.

'The good news for students is that the largest tranches of federal student aid are made at the beginning of the terms and will have already come and gone by the time Treasury runs out of money,' Draeger said. 'But that will be small consolation to the students who are expecting and depending on upcoming disbursements.'"

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Publication Date: 9/28/2021

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