Higher education is bracing as the nation's debt ceiling nears its limit, The Hill reported.
Justin Draeger
Republicans and President Biden have been in negotiations for weeks over the matter. If no deal is made, the U.S. is expected to default by the beginning of June, affecting markets and possibly the global economy. And if the U.S. defaults, colleges and universities would lose significant federal funding and students may lose access to aid.
“Unfortunately, in the last several years, colleges and universities and financial aid offices have gotten used to a political game of chicken in Washington, D.C., and the potential for federal shutdowns, but this one is just a little bit different,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators.
Colleges are hoping that a potential default would be short and have a limited effect on students, given that aid is mostly distributed in the fall or winter. However, even a few weeks of crisis could affect students.
“For individual students who don’t receive their student aid disbursements, the difference between a couple of days and a couple of weeks can be huge because federal student aid just doesn’t cover tuition fees at an institution,” Draeger said. “It also covers things like rent and other costs of living, like insurance or transportation and food.”
A long-term default could threaten teachers’ jobs amid a preexisting shortage, said Randi Weingarten, president of the American Federation of Teachers.
And experts are not confident that higher ed will be a funding priority in the case of a longer default.
