How Will the Election Results Affect Student Financial Aid?
November 08, 2012
President Obama was reelected on November 6, 2012, but control of Congress remains split. Republicans retained control of the House and Democrats retained control of the Senate. The Democrats may have gained two seats in the Senate, but they still do not have a supermajority. A supermajority (a three fifths majority) is required in the Senate to end a filibuster by closing off debate on a bill and moving to a vote.
So passage of any legislation will require cooperation and compromise between the two parties. Each side will have to give a little to get a little.
There is some hope that the environment on Capitol Hill will be a little less contentious in the aftermath of the election. The election results may spur the political parties to adopt a change in strategy, since the current strategy did not result in a change in control of Congress. Blocking the passage of legislation is not as effective in influencing the electorate as passing legislation that addresses the voters’ needs and priorities. But it is also likely that politics will continue to trump policy. Split control of Congress normally slows the pace of legislation, but the 112th Congress was the least productive Congress ever.
On a positive note, policymakers are more likely than ever before to pay attention to the needs of students. Students were once again the swing vote in the 2012 election. About half of all eligible voters age 18 to 29 voted in the 2012 election, similar to the participation rate in the 2008 election. Voter turnout among young Americans was up significantly from 37 percent in 1996, 41 percent in 2000 and 48 percent in 2004. The under-30 age group represented 19 percent of all voters in 2012, up from 18 percent in 2008. Student votes mattered in the battleground states of Florida, Ohio, Pennsylvania and Virginia, deciding the presidential election.
The Fiscal Cliff Approaches
Three issues loom on the immediate horizon, collectively referred to as the fiscal cliff. These include the automatic budget cuts from sequestration, the expiration of the Bush and Obama tax cuts, and the debt ceiling. Dealing with each of these requires an affirmative vote. So each party has some leverage over the other. Democrats, for example, could refuse to extend the tax cuts, while Republicans could refuse to increase the debt ceiling. So there’s likely to be more brinksmanship as policymakers try to reach an agreement on the balance between spending cuts and revenue increases.
A failure to address the fiscal cliff could have a big impact on student financial aid.
Sequestration will yield an automatic 8 percent cut of domestic spending, including student aid. The main exception is the Pell Grant, which is not subject to sequestration in FY2013 because the Budget Control Act of 2011 specified Pell Grant funding levels for FY2013. However, the Pell Grant program will be subject to an 8 percent cut in FY2014 and subsequent years if Congress does not act.
Need money to pay for college?
Every semester, Fastweb helps thousands of students pay for school by matching them to scholarships, grants and awards for which they actually qualify. Sign up today to get started. You'll find scholarships like the Course Hero's $5,000 Scholarship, and easy to enter scholarships like Niche $1,000 October Scholarship.