Congress Faces Spending Impasse as Short-Term Fixes Face Obstacles in Both Chambers

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

The annual appropriations cycle hit a significant snag last week that could prompt a government shutdown at the end of the month, as congressional leaders continue to grapple with how to craft a short-term spending deal that can clear both chambers within the next week.

Now with a government shutdown becoming more likely with each passing day, federal agencies — including the Department of Education (ED) — are beginning to circulate contingency plans that will go into effect should non-essential government programs be forced to undergo a furlough due to the potential gap in funding.

Should the potential shutdown be short-lived, meaning the lapse only occurs for a few days before Congress works out a deal, the impact on ED could be minimal and institutions would be unlikely to experience a disruption related to federal programs.

However, if a shutdown were to drag on the federal government could be faced with a significant shortage of resources. The Congressional Research Service recently updated its report that answers frequently asked questions about the impact of government shutdowns, outlining departmental operations as well as impacts and costs associated with funding lapses. Some of those impacts from the previous shutdown in 2018 included school’s being unable to pull down funds, and their ability to retrieve or submit reports from ED.

Per ED’s guidance, in preparation for a possible shutdown in 2021, some basic operations (such as processing FAFSA, disbursing Pell Grants and Federal Direct Student Loans, and servicing Federal student loans) could continue for a very limited time but that they could experience some level of disruption due to a lapse in funding.

It is also unclear how a shutdown could impact the impending rollout of the 2024-25 FAFSA.

This week, in an effort to avert a shutdown, the House will try to advance a handful of its appropriations bills, but GOP hardliners, who blocked earlier versions of those bills on the floor, could continue to reject those proposals. Even if the House succeeds in passing some of the spending bills, they would likely be rejected by the Democrat-controlled Senate.

Meanwhile, the Senate is beginning to formulate a short-term extension on the spending deadline, known as a continuing resolution, that could garner bipartisan support and avert the impending shutdown. However, if the Senate’s short-term bipartisan fix were to pass it would still need to pass the House, where Republican members have threatened to protest a bipartisan bill.

Throughout the summer, negotiations on all 12 spending bills, including the Labor-HHS-Education bill which funds ED, have seen little progress in either chamber.

The House advanced its Labor-HHS-Education bill out of a subcommittee in July, but the bill was never taken up by the full committee. That proposal would slash funding for education-related programs with an overall request of $67.4 billion to ED, a reduction of $12.1 billion from the fiscal year 2023 enacted level and $22.6 billion less than the president’s budget request.

The Senate’s proposal, which advanced out of the full appropriations committee by a bipartisan vote of 26-2, contained $79.6 billion in discretionary funding for ED. This total was below the President’s budget request for education spending, but spared a number of higher education programs from steep cuts that were proposed in the package put forth by House Republicans.

NASFAA will continue to monitor these impacts. Stay tuned to Today’s News for more details concerning fiscal year 2024.


Publication Date: 9/27/2023

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