Explore the Sequester’s Effects on Higher Education Funding

Thursday, March 7, 2013

One question we're getting a lot at the Student Loan Ranger is how the sequester will affect student borrowers. Nobody knows for sure, but there are certain to be short-term consequences that will disproportionately hurt low-income students and there are likely to be long-term ones as well.

The Congressional Research Service defines sequestration as "the permanent cancellation of budgetary resources by a uniform percentage … applied to all programs, projects, and activities within a budget account." The particular sequester everyone is talking about now was passed as part of the Budget Control Act of 2011.

The idea was that the broad budget cuts—including 8.2 percent to non-exempt, non-defense discretionary funding—in the sequester would be so harmful that they would spur a Joint Select Committee on Deficit Reduction (the "super committee" you may have heard of) to replace them with a bipartisan plan to cut $1.5 trillion over 10 years and incentivize Congress to pass that plan by Dec. 23, 2011. Alas, the super committee failed to create a bipartisan compromise.

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