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

Black Issues in Higher Education, Jan 25, 1996 by Ronald A. Taylor

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.