December 11, 2012 | by John Squires |

How the Fiscal Cliff will Affect Colleges

We have collected some links to information that can help colleges and universities review information on how the fiscal cliff will affect them and their students. 


Liz Clark, the Director of Congressional Relations at NACUBO, does an excellent job of summarize the potential changes, especially for College CFO's and other higher education finance administrators.

The White House

Inside Higher Ed

IHE has been covering the fiscal cliff story and how it relates to colleges and universities well for quite a while now. Below you can preview some of their latest stories with links to read more. 

The Fund-Raising Cliff? - For more than a year, higher education organizations have urged Congress to somehow avoid the “fiscal cliff” -- the dramatically named combination of spending cuts and tax hikes that will take effect Jan. 2 if lawmakers cannot agree on a plan to reduce the deficit and extend expiring tax cuts and benefits. Read more:

Fiscal Cliff Diving - I have to admit finding the “fiscal cliff” debate a little bit silly, given that the “cliff” in question is entirely artificial. But if you start pulling that thread, it’s not clear where it ends. And even if the cliff is a figment of the collective political imagination, the harm that cliff-driven decisions could do is very real. If you swerve your car to avoid the unicorn you’re hallucinating, the tree you crash into isn’t a hallucination, and the damage done is real and potentially terrible. Read more:

Research Spending, Before the Cliff - Research university administrators are understandably jittery about the fiscal cliff facing policy makers in Washington, given the prospect that federal budget cutbacks would shave -- if not savage -- government funds for academic research and development. Read more:

Cliff time - Notwithstanding the impact of Sandy, I have much to be thankful for, including this year’s very welcome Thanksgiving Day break. But what I am most thankful for is not yet a done deal but rather a new feeling that suggests we will avoid the fiscal cliff. The meeting a week before Thanksgiving between the Congressional leadership and President Obama seemed to end with a sense on all sides that fiscal disaster could be avoided. In my opinion, there is no choice but to do so, but I am a spectator and Congress and the President are the ones who need to make it happen. Read more:

What's Next for the Pell Grant? - It’s been a nail-biting few years for Pell Grant advocates, as Congressional budget crisis after Congressional budget crisis raised the specter of deep cuts to the major federal financial aid program for low-income students. Read more: 

The Chronicle of Higher Education

Americans Prefer to Cut Spending on Defense Over Education, Poll Finds - If negotiations in Washington to avoid a "fiscal cliff" come down to a choice between cutting spending on defense or education, a majority of Americans would spare the education programs, accord...Read more:

Colleges Worry That Tax Incentives for Donations Are Again on the Chopping Block - Higher-education advocates are closely watching how the current fiscal negotiations in Washington will affect federal support of colleges and universities. But many are also concerned that a chan...Read more:

Amid Federal Budget Battle, Report Cites Centrality of Scientific Research - As negotiations over the federal budget reach a climax, a new report urges the government to spend more money on scientific research and do it more wisely. Read more:

Lessons From America's First Fiscal Cliff - America faced its first fiscal cliff in 1893. The date should be familiar. It was the start of the Panic of 1893, and it led to the biggest shift ever in the composition of the U.S. Congress. Conte...Read more:

Colleges React to Potential Research Cuts

I gathered a few links from universities concerned with cuts to research and development. 

MIT - Webinar Recording: THE FISCAL CLIFF: HOW IT AFFECTS MIT - Will R&D fall off the fiscal cliff? Policymakers still haven't taken action to avoid sequestration. The sequester was a huge set of budget cuts put in place by Congress as a carrot to make sure the Joint Select Committee on Deficit Reduction (known as the "Super Committee") acted to develop a balanced deficit reduction strategy. As a result of the Super Committee's failure to come up with a balanced strategy, the discretionary budget -- which includes the funding budget for all the major science research agencies -- will see a huge across-the-board cut of about 8.7% take effect on January 2, 2013. View the recording:

Princeton - Looming fiscal cliff threatens Princeton research - The University could face severe cuts in research funding and a shrinking endowment in the near future if Congress fails to reach a deal on the so-called fiscal cliff, which will trigger an array of automatic tax increases and budget cuts on Jan. 1. Read more here -

Washington Post

Family Income and Tax Cuts Calculator - Use this tool, based on data from the Tax Policy Center, to estimate how your family would be affected by the Democratic and Republican plans for dealing with scheduled tax hikes — and what would happen if no deal is reached. The math is complicated: The expiration of all or part of the Bush-era tax cuts could have the biggest impact on most families, but the end of the temporary payroll tax and new taxes related to the health-care overhaul mean that most families would see their tax burden increase under any scenario. Use the tool here:

Fed is expected to launch new bond buying program to aid economy as ‘fiscal cliff’ looms - Fed is expected to launch new bond buying program to aid economy as ‘fiscal cliff’ loomsWith a nervous eye on the “fiscal cliff,” the Federal Reserve is expected this week to announce a new bond-buying plan to support the U.S. economy. Read more:

K-12 - Fiscal cliff: Schools would be affected inequitably - It is not certain that President Obama and Congress will come to a budget deal before the end of the year to avert automatic budget cuts, including in education. Here Anne O’Brien, deputy director of the Learning First Alliance, explains what would happen to school districts if the country goes over what is being called “the fiscal cliff.” The Learning First Alliance is a partnership of 16 education associations with more than 10 million members dedicated to improving student learning in America’s public schools. Read more:


Let us know if you have any additions to this list as I am sure there is tons of material about how the fiscal cliff might affect schools, from community colleges to state schools, from not-for-profit to for-profit institutions.