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UC and the Federal Government Shutdown Assessing Impacts to Research, Education, Health Care

By News and Media Relations on January 22, 2018 in University

Updated 9 p.m. Jan. 22: President Donald Trump signed a short-term spending bill tonight, ending the government shutdown that had begun nearly three days earlier, at midnight Friday (Jan. 19).

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The University of California prepared the following briefing prior to the federal government shutdown that took effect at midnight EST Jan. 19. The briefing lays out what the university hoped to see in a deal, and how the university would be impacted by a shutdown.

The University of California is hopeful that a final deal can be reached that averts a government shutdown and that includes increases in the spending caps to allow for strong funding for research, education and health care programs.

UC strongly supports passage of bipartisan legislation that will protect California and our nation’s Deferred Action for Childhood Arrivals (DACA) recipients and provide them with the opportunity to continue to live, work and contribute to the only country most of them have ever known.

In early November 2017, UC President Janet Napolitano, in a letter to the California congressional delegation, urged Congress “to secure needed relief from the sequestration caps for nondefense discretionary (NDD) programs for FY 2018-2019 as Congress negotiates the final Fiscal Year (FY) 2018 budget and appropriations agreements. In addition, the university urges you to provide robust funding for programs of importance to UC that will advance scientific and technological innovation, promote unparalleled educational opportunities for a new generation of Californians, and facilitate the university’s commitment to providing exceptional health care for Californians.”

The federal government is a key partner with UC in ensuring that Californians have affordable access to high-quality higher education and that university researchers are able to continue to pursue the scientific and technological breakthroughs that keep our state and the nation at the forefront of innovation and economic development. In addition, federal funding is key to UC’s ability to provide top quality health care services to millions of Californians.

We urge Congress to pass an FY 2018 funding package that includes strong and sustained funding for education, research and health care programs.

Congress must also act to put an end to the sequestration spending caps. UC has significant concerns about the passage of legislation, including a continuing resolution (CR), that keeps sequestration caps in place and does not allow for real investments on the discretionary side of the federal budget. Maintaining the caps will have an adverse impact on key programs that support UC’s education, research and health care enterprise.

The university recognizes that defense programs have also been constrained by sequestration required under the Budget Control Act of 2011. As with the 2013 and 2015 agreements, UC urges Congress to provide parity in sequestration relief for both non-defense and defense discretionary programs.

Q&A

How will a government shutdown impact the University of California?

  • The impact will depend on the length of a federal government shutdown as well as guidance from the Office of Management and Budget and each of the federal agencies.
  • We are monitoring the situation closely and the guidance given out from federal agencies.

Research

  • We expect little to no immediate impact on research funding. Of course, our assessment will change depending on how long a federal government shutdown lasts.

Additional background: We expect that the Office of Management and Budget will release guidance to address activities conducted by federal employees during a shutdown. We will review those materials when they are issued. (During the government shutdown in 2013, generally, federal employees were not allowed to conduct routine activities in oversight, inspection, accounting, administration, etc. No new grants or contracts were allowed to be issued. We expect that each agency will provide additional and detailed guidance regarding a government shutdown and may have some discretion.)

Education

  • It is important to underscore that the fiscal year budget that the government is trying to finalize now applies to academic year 2018-19, which will start on July 1, 2018. The final funding totals would impact Pell Grants that are issued after July 1, 2018. The University of California has urged Congress to preserve Pell Grant funding as well as other key financial aid programs.
  • If a short federal government shutdown were to occur, we expect it to have limited, if any, impact on our educational services and financial aid programs. If the shutdown were to become prolonged, we would feel an impact, but we are hopeful that Congress will be able to reach agreement on a budget that includes strong funding for education and research programs.
  • The university will do all it can to shield UC students from harmful effects of a short government shutdown, including — if need be — advancing UC funds to substitute for federal financial aid so that financial aid reaches students when promised. Again, we do not expect a short federal government shutdown to have an immediate impact on our students, but the final appropriations totals could affect the student aid they receive next year.
  • With $377 million in federal Pell Grants and $1.1 billion in federal student loans annually, holding students harmless during an extended shutdown could require a significant amount of forward funding by the university.
  • Furthermore, students who have not completed the required processes to receive federal financial aid (e.g., filing a FAFSA or completing loan forms) would be required to wait during any government shutdown before the university could verify their eligibility.

Q&A: Perkins Loans

The Perkins Loan program expired on Sept. 30, 2017. UC continues to urge Congress to reinstate this important student financial aid program.

How many UC students receive Perkins Loans?
  • Perkins Loans, which in 2015-16 provided nearly 16,000 very low-income UC students with almost $25 million in financial aid, are a vital resource to those students who otherwise would have difficulty accessing funds from a private lender.
How will current UC students who receive Perkins Loans be impacted?
  • Based on grandfather provisions included in the Higher Education Act, UC will be allowed to make Perkins Loans to certain students for up to five additional years (through Sept. 30, 2022) to enable students who received loans prior to Oct. 1, 2017 “to continue or complete courses of study.”
What about new Perkins Loans?
  • The program ended on Sept. 30, 2017 and campuses are not able to issue new loans. UC continues to urge Congress to save this important student financial aid program.

Health care

  • UC is committed to delivering medical care to the many patients for whom we contract with the federal government to provide services, including patients enrolled in Medicare and Medicaid. However, UC’s five medical centers are among the most significant providers of medical services to these patient populations throughout California, and we need to pay our bills, including paying physicians, nurses, pharmacists and other hospital staff, while meeting all our obligations. While we can help ensure services continue, there is no precedent for a prolonged government shutdown.

National labs

  • The national labs are federally funded through contracts with the Department of Energy and the National Nuclear Security Administration. The labs will receive detailed guidance regarding a government shutdown from those federal agencies. Media questions regarding the impact of a government shutdown on Berkeley, Los Alamos or Livermore National Labs should be directed to the public affairs offices at the respective lab.

About the author(s)

News and Media Relations News and Media Relations is a unit of the Office of Strategic Communications.

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