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The Likely Impact of Sequestration on Higher Education

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The Likely Impact of Sequestration on Higher Education

February 07, 2013

Recent attention in Washington and throughout the country has focused on the so-called “fiscal cliff.” The fiscal cliff was comprised of two major components: the expiration of a number of significant tax incentives, and a massive, across-the-board reduction in federal spending through the budget process known as sequestration. As has been well covered in the media, a last-minute deal to avoid “going over the cliff” was struck after high-stakes negotiations, resulting in the American Taxpayer Relief Act of 2012 (H.R. 8).

The fiscal cliff deal resolved a number of key tax provisions by either making those provisions permanent or extending them for a number of years. On the spending side, it modified the impact of the sequester and delayed its implementation until March 1.

What is less well known is exactly what this deal means for programs of interest to higher education. This brief paper reviews what is happening and the implications for these programs.

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