Tuesday , December 11 2018
Home / Education / Students Effected By Automatic Budget Cuts From The Sequester

Students Effected By Automatic Budget Cuts From The Sequester


The sequester will effect everyone from government workers to students. Both graduate students and parents of undergrads have been receiving letters from the Department of Education, notifying them of the increases in fees in the Direct PLUS loans as a direct result form the automatic budget cuts.

“On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as the ‘sequester’. While this law does not otherwise change the amount or terms or conditions of your Direct Loan, it does raise loan fees on Direct PLUS Loans first disbursed after March 1, 2013,” reads the letter. “Specifically, the fee on your loan will increased from 4.0 percent of your loan amount to 4.204 percent . For example, the fee on a $10,000 PLUS loan will increase by $20.40 from $400 to $420.40.”

This small increase will have a huge impact on families sending their children to college. Critics of the automatic budget cuts say it comes as a result of the government not cutting back on wasteful spending. A recent reports shows that federal agencies could have saved over $65 billion in 2012 if they’d listen to the audit recommendations of their respective inspectors general.

The unnecessary spending is across the board. Another report, released by the Government Accountability Office, pointed out programs that had excessive costs that could be trimmed and enhance revenue.

Student debts has reached $1 trillion, surpassing American credit card debt. Students will also be effected by cuts in funding for federal work study and supplemental education programs.


Shanika Simmons

About shanikasimmons

Shanika Simmons, senior at Spelman College, will be receiving her degree in Economics in May 2013. Raised in a small town, Shanika moved to Atlanta to further her education in 2008. Combining her love for economics and writing, she began her blog "A Broke Student's Handbook" in 2012. Since then, Shanika has received many opportunities to write for Global Good Network, TBA Magazine, and The AUC Network. Now Broke2Dope.com, her blog has transformed to a place where students can find money management advice, features, tips, and budget friendly fashion ideas.

Leave a Reply

Your email address will not be published. Required fields are marked *