Thousands of Ohio’s neediest college students could see the federal grants and work-study jobs they are expecting next school year disappear because of automatic cuts, known as sequestration, that Congress did not take action to avoid.
The White House estimates that 3,320 fewer students in Ohio will receive the Supplemental Education Opportunity Grant and 1,450 fewer students will get work-study jobs in 2013-14, when $86 million are stripped from the federal programs.
Colleges and universities are awaiting official information, but the estimated impact on local institutions ranges from no loss for Sinclair Community College and Urbana and Wilberforce universities to a reduction of $91,318 in grants and work-study at Cincinnati State and Technical Community College, according to the National Association of Student Financial Aid Administrators.
“There are a lot of questions, and because cuts of this scope and magnitude are really unprecedented, it could be a while yet before we get all the answers,” said Megan McClean, director of policy and federal relations for NASFAA.
Sequestration, which took effect March 1, will also hit research budgets and will reduce Medicare payments for university hospitals by 2 percent. Details have not been released on those changes either, but institutions are bracing for the cuts. University of Dayton Research Institute President John Leland said his organization has already seen a major impact because customers are cutting spending and postponing decisions on projects.
Additionally, the sequester calls for students to pay small increases in fees for federal student loans, which could equal $2.75 for a $5,500 direct loan and $20 on a $10,000 Parent Plus loan. Iraq-Afghanistan Service and TEACH grants could also be reduced, according to the U.S. Department of Education.
Financial aid officials are thankful that the Pell Grant — the cornerstone of federal financial aid — is fully funded for upcoming school year. Nearly 354,000 college students in Ohio receive $1.2 billion annually from Pell. The grant’s future, however, is not known past 2013-14, said Kim Jenerette, Cedarville University’s financial aid director.
Some low-income students could feel the pinch of the cuts from both work-study and the Opportunity Grant, which is worth up to $4,000 and goes to the neediest students, said Brent Shock, director of Miami University’s Office of Student Financial Assistance.
Miami senior Bryan Stewart said income from his work-study job helps him pay for groceries, books and other essentials. Stewart works for minimum wage about 15 hours a week in Miami’s financial aid office, and he previously tutored elementary students through America Reads.
“Without it, you would be stuck between a rock and a hard place because there’s only so many employment options in Oxford,” the Oakwood native said.
Cedarville student Katie Hughes also said there is much competition for jobs off campus. She works for minimum wage six to 10 hours week in Cedarville’s financial aid office and is saving her money. “I do think that once I graduate, it would be hard not having some money to pay off my loans and pay for an apartment,” Hughes said.
Work-study also provides jobs with flexible hours to meet students’ schedules, said Vanessa Masters, who will graduate in May from Clark State Community College’s medical lab technical program. Masters is paid $8 an hour and works 18 hours a week in the college’s Career Management Office.
“It was a big weight off my shoulders when I got that job,” Masters said. She said before getting her job, she used student loan money to pay the bills, and by the end of the semester, that money was running out. Work-study provides a consistent income.
“I would definitely struggle without it,” she said. “It’s really hard being a full-time student, plus I’m a parent. It does make it a lot easier.”
Financial aid officials said schools are aware that cuts will take place, and letters going to students with information on their aid will include a caveat that funding depends on the federal budget. They are also awaiting the March 27 deadline for Congress to act to fund the remainder of 2013 or face a government shutdown.
The University of Dayton is already considering how it can help students impacted by the cuts with other grants or on-campus jobs with pay covered by the university instead of taxpayers, said Kathy McEuen Harmon, assistant vice president and dean for admission and financial aid.
The cuts to the work-study and grant programs come from the “fair share” funding, which is above the guaranteed base funding, McClean said.