Automatic spending cuts threaten college financial aid
Federal Financial Aid to be cut 8.4% starting March 1
San José, CA – On March 1, the automatic spending cuts demanded by the 2011 Budget Control Act are scheduled to go into effect. These cuts were originally scheduled to go into effect Jan. 2, but were delayed as part of the solution to the so-called ‘fiscal cliff.’ Included in the spending cuts is an 8.4% reduction in federal financial aid. While the large Pell Grant program is exempted, other federal financial aid, including the Stafford Loans, Work-Study, Perkins Loans and others would be all reduced by 8.4%. This would lead to less aid to students receiving financial aid, and some would be cut off entirely.