NAICU Washington Update

No Shutdown Showdown This Year

August 06, 2012

Shortly before leaving town for their August recess, congressional leaders announced agreement on a $1.047 trillion, six-month continuing resolution (CR) to avoid government shutdown politics this fall going into the elections.  This total funding level is the same as the Fiscal Year 2013 cap agreed to last summer in the Budget Control Act of 2011.  The deal has White House approval.  Staff will work on the details over the August recess so that members can vote on the agreement when they return the week of September 10.

As details emerge about the CR passed on July 31, it will be important to watch how the Pell Grant program is funded. Student aid programs are forward funded, which means the FY 2013 appropriations bill sets grant levels for the 2013-14 award year.  If the CR flat funds Pell at the current level funding (which CRs usually do) there won't be enough money to  fully fund the $5,635 scheduled maximum Pell Grant because more students have qualified for grants than estimated. 

Financial aid administrators will be packaging aid for the 2013-14 award year just as the CR is expiring next spring.  One way Congress might avoid complications for the next cycle of student aid packaging would be to include additional funds for Pell in the pending CR, to ensure there is no funding shortfall.

The six-month CR takes the annual funding fights out of the lame duck session agenda.  However, it doesn't resolve the looming sequestration hatchet set to fall January 3.  The Office of Management and Budget has issued guidance to agencies about sequestration, restating that the President believes Congress should take steps to avoid the process.  Congress has five months to do so, but if it can’t, agencies will have to look at final FY 2013 funding levels before cuts can be made.  OMB also notified Congress of its intent for the President to exempt military personnel from sequestration, putting even greater pressure on the rest of the Defense budget.

NAICU will track funding developments throughout the fall, and will alert members to the likely impact of those decisions on student aid.

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