Thursday, July 28, 2011
Government default could delay TCU’s financial aid funds
However, the unpaid amount would simply appear as "anticipated aid" on students' bills until the money arrived.
If Congress does not reach a solution to the current debt ceiling crisis, $34 million in anticipated federal financial aid to TCU is likely to be delayed.
Director of Scholarships and Student Financial Aid Mike Scott said that’s the amount the university anticipates receiving in federal funding from Pell Grants, Stafford Loans, Parent Loans and Federal Supplemental Educational Opportunity Grants.
Scott said the federal government allows the universities to disperse this money ten days before the start of school, which, for TCU would likely be the week of August 15. However, Scott said, "If they didn't raise the debt ceiling and it went on beyond a two week period, it could affect the funds being able to come in to the university."
The U.S. Treasury would have to decide which bills to pay, and it's likely financial aid programs would not be a high enough priority, he said.
A representative from the Department of Education said plans for a government default had not been worked out yet, and would not comment on whether universities should be concerned about the potential delay in funding.
Scott said the delayed payment from the federal government would not directly affect most students. The unpaid amount would simply appear as "anticipated aid" on students' bills until the money arrived.
"We certainly wouldn't cancel somebody's registration or something like that because of loan funds or financial aid," Scott said. "TCU wouldn't penalize students because of that."
Scott said there could be a problem for students who rely on federal funds to pay for off-campus living expenses because they would not be able to withdraw the money from their account to pay their rent.
As for the university, Director of Budgets and Financial Planning Kenneth Janak said TCU was fully prepared to continue operation without the government's funding.
"Should the stalemate continue past mid-August, the university is well prepared to continue operating as normal…During this time students will be making fall tuition payments, and the university expects to have sufficient cash balances to withstand any delay in federal funding," Janak wrote in an email.
The university also receives approximately $800,000 to $1 million per quarter in federal research reimbursements. Assistant Direct of Sponsored Research Teresa Miles Hendrix said her department anticipated a reimbursement check September 30 to pay for research expenses, including salaries of institutional behavioral researchers.
Controller Cheryl Miller wrote in an email that it's unlikely disbursements as far out September 30 would be affected.
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