Without debt ceiling deal, colleges fear impact on financial aid

BATESVILLE, AR (KAIT) – Even if lawmakers in Washington reacha deal to reopen the government and raise the debt ceiling, the whole debatehas made many school administrators question the cost to their students andstaff.

The past 16 days and the potential threat of a governmentdefault have created a lot of disruptions, according to Deborah Frazier, thechancellor of UACCB, or the University of Arkansas Community College at Batesville.

She worries that if lawmakers fail to reach a permanentsolution, then fights could resume on these same issues in a few months –creating uncertainty about cuts to financial aid and other federal programs allover again.

"There are just so many uncertainties," Frazier said, "andthat's not a very good environment to do your very best work in."

At every school, answers are important, but Frazier saysUACCB has mostly gone without them the last two weeks. The government shutdown mayhave left only one staff member at the college furloughed, but it caused morethan a few headaches on campus.

She says the school has not only dealt with a brief lapse infederal work-study funding for several students, but the state also made thesenior staff members provide documentation on all federal funding.

"We have been on probably three conference calls that lastedover an hour with the senior administration stuck in this office trying todetermine what documents we are to present," Frazier said. "If we need thedocuments, we've had to have directors ask for that documentation, so thisdisruption has been, I think, great."

She, however, is mainly concerned about what will happen iflawmakers fail to raise the country's borrowing limit – the so-called debtceiling – and the country cannot pay its bills.

"If in fact the government goes off the fiscal cliff, that'stotally uncharted water for us," Frazier said. "What will happen to our federalemployees, our grant employees? What will happen with our students? Pell grantsmay be an uncertainty, student loans."

"About 78 percent of our students are on some type offinancial aid," she added. "We have many first-generation students,non-traditional students, traditional-aged [students] trying to determine howthis will affect them and giving answers to employees."

She fears UACCB might have to end some of its programsfunded by federal grants that help students in need, like Career Pathways andTRiO.

"Our TRiO program would be truly affected because all ofthose individuals would have to be furloughed," Frazier explained. "They dealdirectly, one-on-one, with about 160 students in academic advising, intutoring. That help would be gone. Truly, it is our students not onlyfinancially but academically how they would be affected by the fiscal default."

There are concerns, too, that a default would affectavailability for financial aid, like student loans and Pell grants.

UACCB has already faced down the possibility of losingfederal financial aid for its students once before. When the school's studentloan default rate went above 30 percent, the government began breathing down theschool's neck, threatening to pull all federal financial aid. The schoolreacted quickly, instituting some new financial counseling programs and forminga default task force. Preliminary numbers show that because of these measures, UACCBsuccessfully got its student loan default rate down to 28 percent.

Frazier says the only ones that can erase the college'sfears about losing financial aid are the lawmakers on Capitol Hill.

"I am a product of the American dream. To have our countryin such disarray, it's worrisome," Frazier said. "Can our Congressmen and Senatorsbecome the statesman that they need to be? That's the word we've kind of talkedabout today – where's that statesmanship?"

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