While all eyes anxiously wait to see whether Congress and the administration can reach agreement to avert the fiscal cliff, federal financial aid faces a fiscal cliff all its own.
As reported by Inside Higher Ed and several other sources, the Pell Grant program, the foundation of federal financial aid for low-income (and increasingly, moderate income students) faces a fiscal cliff all its own. At the end of the current fiscal year, the program will face a $6 billion gap between what’s available and what’s needed for the subsequent fiscal year. Compounding the problem is the July 1, 2013 deadline when subsidized Stafford loan rates are slated to increase to 6.8 percent. If that were all, it may be manageable as a number of options exist to trim spending from financial, but the president’s income-based repayment (IBR) program is making it even harder for Congress to make ends meet for federal financial aid.
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