Excerpt from Inside Higher Ed:Short-Term Stability, But ...
August 1, 2011
Congressional leaders appeared late Sunday to have reached a deal on increasing the nation’s debt limit that would avoid many of higher education’s worst-case scenarios: cuts to Pell Grants, the end of subsidized student loans, or a government default that would leave student financial aid and other funding for colleges in limbo going into the fall semester. But as details about the deal began to emerge Sunday evening, it became clear that the plan leaves colleges and universities with plenty of long-term uncertainty.
The plan, which will be presented to Congress today, gives President Obama authority to increase the debt limit by at least $2.1 trillion and calls for at least $2.4 trillion in spending cuts over the next 10 years. About $900 billion in cuts would take effect immediately through discretionary spending caps. The rest would be decided on by a Congressional "super-committee." If the committee does not reach an agreement by Thanksgiving, $1.2 trillion in cuts would automatically go into effect in 2013, including cuts to defense spending, domestic discretionary spending and some entitlement programs...
Full article at http://www.insidehighered.com/news/2011/08/01/higher_education_in_debt_ceiling_deal
And an analysis from a weekly blog yours truly does for another organization (The Employment Policy Research Network) on why negotiations tend to produce last-minute deals and why that isn’t always a Good Thing is at http://www.employmentpolicy.org/topic/15/blog/mitchell%E2%80%99s-musings-8111-good-news-and-bad-news-real-deadlines-negotiations-and-negotia
Suffice it to say, the machinery that has been agreed to seems complex:UPDATE: As more details come out, it appears that Pell grants were saved by reducing other forms of student aid. See http://money.cnn.com/2011/08/01/news/economy/debt_ceiling_students/index.htm Thanks to Bob Samuels for passing this reference along.
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