Uncertainty over research funding persisted to the last possible minute, however in the end, a financial budget deal that averted the \”fiscal cliff\” was passed by Congress and signed by President Barack Obama just over time. And that deal contained numerous provisions that\’ll be welcome to universites and colleges nationwide, as it leaves untouched funding for advanced schooling research along with the tuition tax credit that can help families reduce their college education expenses.
The tuition tax credit C called the American Opportunity Tax Credit C is going to be extended for at least five years. The program allows families to deduct as much as $2,500 from their taxes each year for up to 4 years for college expenses. If the deal on the budget was not struck, the AOTC might have likely become a victim from the 8.2% across-the-board cut to domestic spending which may have gone into effect on January 1st, 2013.
Without the bill’s passage, an 8.2 percent across-the-board cut to domestic discretionary programs along with a 7.6 percent cut for mandatory spending programs would have immediately?affected several funding streams important to universities, including sources of scholarship programs and research grants. Affected programs included the National Institutes of Health, the National Science Foundation and Dod aid to veterans to go to college. Those sequestration cuts are now delayed for 2 months. (Pell Grants were not affected simply because they were not susceptible to sequestration.)
However encouraging the outcomes of this round of budget talks have been, it still remains only a temporary reprieve. The bulk of negotiations within the Federal budget aren’t scheduled to start until early this spring when government watchers already are predicting a difficult fight between your President and House Republicans within the hike in the debt ceiling.
The Huffington Post is anticipating that higher education funding is going to be on the table as one place where cuts might be made, and research funding will probably become an outsized target for deficit hawks looking for ways to cut government spending. Also on the table will be changes in federal financial aid eligibility, to chop the number of individuals who qualify for financial assistance like Stafford loans and Pell grants.
But the president warned against any more spending reductions Tuesday night following the fiscal cliff bill passed, saying, “We can’t simply cut our way to prosperity,” and referring specifically to raised education.
“We can’t keep cutting things like basic research and new technology but still expect to succeed in a 21st century economy,” Obama said. “So we’re going to have to continue to move forward in deficit reduction, but we must do it in a balanced way, making sure that we are growing even as we get a handle on our spending.”