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Shutdown blues: between budget debate and blizzard, colleges take a double-barreled blast

Washington — Higher education found itself trapped-recently between conflicting air masses — an icy blast from a howling winter and the hot air of a fractious Congress-White House debate.

The budget impasse between the Clinton White House and the Republican-controlled Congress left the higher education establishment in a lurch:

* 140,000 student loan applications for the current semester were unprocessed:

* More than $100 million in National Science Foundation funds earmarked for 1995-96 research projects remained unspent:

* $1 billion in National Institutes of Health grants have not been awarded: and

* With passport offices shut down visiting scholars are stranded without entry visas or other travel document services.

The impact amounts to a rude wake-up call for students, faculty and administrators, according to education observers.

“A lot of [federal fund] recipients on campus are getting a political education and realizing the role that the federal government plays in their lives. It’s more than just the Post Office and the Army,” said Dr. Arnold Mitchem, executive director of the National Council of Educational Opportunity Associations.

He and other higher education advocates here say that the shutdown has forced those who inhabit a world that generally views itself as only remotely connected to the daily swirl of federal policy-making apparatus to realize that it is inextricably tied to the vagaries of debate inside the Capital Beltway.

“I think most people on college campuses certainly did not think the shutdown would last long,” said Larry Zaglaniczny, assistant to the president of the National Association of Student Financial Administrators.

“Too often, people just take things for granted. These shutdowns make people more aware of how things work,” Mitchem said.

The result is likely to be a surge of grant request approvals before the impasse hits the Jan. 26 deadline for Congress and the White House to reach an agreement on a plan to achieve a balanced federal budget by the year 2002, said William “Bud” Blakey.

Catching Up

Work began piling up Dec. 16, when legislation funding nine Cabinet departments and dozens of other agencies ran out, leaving 480,000 employees working without pay and an additional 280,000 civil servants on furlough.

The federal government lost more than 11 million employee hours per week while the workers were absent. “There’s just going to be an overwhelming amount of catch up that’s got to be done,” said Janice Lachance, spokeswoman for the Office of Personnel Management.

The source of the delay in processing student federal loan applications, for example, was not within the Department of Education bureaucracy. The bottleneck occurred because of the absence throughout the government of the 280,000 federal workers, who were labeled “non-essential” personnel at the beginning of the shutdown Dec. 15.

Those people are necessary to perform the routine checks needed to advance the application forms through the bureaucratic process. Their role? They manage the data needed to verify each applicant’s Social Security number, immigration status and criminal record.

The backlog affects mainly new students or those who are just now applying for student loans for the current semester. Until those applications are processed, however, the students will not be able to enroll and the schools will not receive the tuition that they would pay.

Most schools did not encounter a cutoff or significant reduction in their flow of federal funds for which appropriation legislation has already been enacted, according to education advocates here.

The primary reason for a muted impact on funds, primarily the Pell Grants that account for tuition, is that in the second week of the shutdown, ED officials sought, and received, a ruling from the Office of Management and Budget that allowed workers to be brought in to handle distributions of Pell Grants, federal work/ study, supplemental education grants and loans under the Perkins loan program.

As a result, most college administrators were able to anticipate the cutoff of funds resulting from the December government shutdown.

There were exceptions. At Virginia Union University in Richmond, VA, treasurer Dallas Simmons Jr. could not arrange for an estimated $600,000 to be transferred to the school’s account electronically from the U.S. Treasury until just before the end of the third week of the shutdown.

Simmons said that his request allowed the school to obtain “about a third” of the federal funds they are entitled to for the 1995-96 academic year.

The money did not wind up in the school’s accounts until after furloughed federal workers returned to work following the shutdown extension caused by what has been called the Blizzard of ’96.

Research Grants in Limbo

The revised policy for processing funds forged in the second week of the shutdown was unknown to some college financial officials.

For instance, St. Paul’s College in Lawrenceville, VA, was forced to begin the second semester with $500,000 less on hand than normal.

“Whenever the government shuts down it puts us out of at least $500,000 from Title IV for the Pell Grants, SEOG and direct loans,” said Richard Summeal, St. Paul’s vice president for financial affairs.

Summeal said he was unaware of the regulatory change. “If they did that and got away with it I sure would like to have known about it,” he said.

Far more dramatic was the impact of the cutoff of federal research grants to colleges and universities.

Constance Horton, director of research administration at Case Western Reserve University, said the shutdown held up at least $1.2 million in grants.

“And that only represented about three grants,” she said of research projects that included examination of the health problems of infants generated by cocaine-addicted mothers.

Research into addicted babies is an example of the kind of research related to African-Americans, she said, but noted quickly that the cutoff affects research that would benefit everyone. One example, she said, is research that had been planned into electronic muscle stimulation that held promise for paraplegics.

“We are about 50 percent below the number of awards that we received last year from NIH. That’s only because they didn’t get them out the door,” she said.

Overall, National Institutes of Health officials said 4,000 grants, totaling about $1 billion through Feb. 1, had not been awarded during the furlough.

At the National Science Foundation, also a federally funded agency, more than $100 million in grants have not been awarded.

International Students Affected

“It is a disappointing situation, and not just from our point of view,” said David Smith, dean of admissions and financial aid at Syracuse University.

“You are talking about young people coming here from half way around the world … and they are confronted by this initial cold shoulder greeting,” he said.

Smith said at least 30 foreign graduate students due to begin classes Jan. 17 at Syracuse were unable to obtain or renew their visas because the federal government’s partial shutdown has closed the consulate offices in their respective countries.

That number was not greater only because, at Syracuse, where 1,500 foreign students are enrolled, officials anticipated what might occur and filed the necessary forms in November after the first government shutdown to guarantee that their foreign students could return, he said.

At Cornell, Jerry Wilcox, director of the International Students and Scholars Office, said the university has been receiving a steady flow of telephone calls since the first day from the Christmas holiday. Calls have come from stranded students in France, Russia, Spain, Colombia and Indonesia, among other places, he said.

“It is so insidious because those people who went home innocently over the holidays to spend time with their families and are now saying, `I can’t come back. This is incredible,'” Wilcox said.

“We are getting reports from all around,” said Andrew Prazuch, director of government relations for the National Association for Foreign Student Affairs in Washington, D.C.

“Luckily for us, this isn’t the fall when a lot of new students are starting. A lot of students don’t go home for Christmas because of the expense. So we could have been in a much worse situation,” he said.

The federal budget impasse is preventing at least 21 foreign University of Iowa graduate teaching and research assistants from obtaining visas to return to school. Dozens of South Korean students set to come to the United States to learn the language and culture have been exposed to a side of American democracy they couldn’t have picked up from a book.

Just because the shutdown is over doesn’t mean an end to game-playing on the Potomac.

“Everybody knows now that this high-stakes, bluff-calling game is being played to the last card,” said Blakey, a lawyer, education consultant and veteran participant in higher education debates.

ED officials were able to continue to distribute money for the federal challenge grants to historically Black colleges and universities, the Frederick Douglass teacher scholarship, Byrd Honor scholars and academic facilities grants, according to ED’s chief financial officer, Donald Wirtz.

He said funds for discretionary programs, including the TRIO programs, were not distributed during the shutdown and will have to await congressional clearance.

Still, should the federal government go into another shutdown, ED is ready to continue shipping money out to higher education.

Said Wirtz: “We have to be ready for that possibility but none of us are taking bets one way or the other.”

COPYRIGHT 1996 Cox, Matthews & Associates
COPYRIGHT 2004 Gale Group

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