Yale braces for federal cuts

Sequester

As the nation braces for across-the-board budget cuts to federal agencies caused by the sequester, University officers are devising a plan in response to expected reductions in federal research funding and government financial aid for students.

The sequester, a series of deep government-mandated cuts signed by President Barack Obama Saturday at midnight, will directly impact the majority of government agencies, but its implications for universities remain unclear until federal agencies determine how they will meet the mandated budget reductions. Yale administrators are meeting today to discuss the consequences of the sequester for the University, President-elect Peter Salovey told the News, and Provost Benjamin Polak said administrators are communicating with their peers at Stanford and the Massachusetts Institute of Technology to ensure Yale is “on the same page” as other major research universities.

Salovey said research grant reductions from agencies like the National Institutes of Health, or NIH, and the National Science Foundation, or NSF, will be the sequester’s most noticeable impact on Yale. Though the cuts will also affect federal scholarships and grants to students, Salovey said Yale will meet students’ full financial needs.

“I think the most worrisome aspect of the sequester for Yale is NIH and NSF and other federal agency research funding,” Salovey said, adding that these agencies are still deciding how the sequester will affect the distribution of research funding. “While I don’t expect that students will feel the effects of sequestration, the University will.”

The sequester took effect after Congress failed to reduce the federal deficit through alternative legislation before the deadline they set as part of the debt ceiling compromise in 2011. Sequestration had been intended as a mechanism for incentivizing lawmakers to reduce the deficit, but the prospect of looming cuts did not succeed in breaking the partisan gridlock. The across-the-board reductions mandated by the sequester include a 7.9 percent reduction to the defense budget, which will cut $42.7 billion, and a 5.3 percent reduction to domestic programs, which will cut $28.7 billion.

Salovey said Yale has made commitments to “fund the full need” of tuition for admitted applicants. Any cuts to federal student aid programs will shift the burden onto Yale — which must already grapple with a $40 million projected budget deficit for the 2013–’14 academic year — to provide the missing funds, he said.

Federal grants and scholarships awarded to Yale students amounted to $4,690,856 this year, and the government also provided $1,558,448 to Yale students in the form of work-study support. Pell Grants, which supported 14 percent of the incoming Yale class in fall 2011, are exempt from the first year of sequestration.

The White House has estimated that the sequester will force the NIH to fund hundreds fewer research grants and the NSF to issue almost 1,000 fewer grants nationally.

Almost 25 percent of Yale’s operating revenue during the fiscal year that ended June 30, 2012, came from grants and contracts, and 81 percent of that funding came from the federal government, according to an October 2012 University financial report. The Department of Health and Human Services, which includes the NIH, provided $419 million in revenue to Yale in fiscal year 2012.

Salovey said government agencies will have to decide whether to cut the number of grants or the budgets of all the grant recipients, both of which could affect future grant proposals as well as grants in the process of being fulfilled over a number of years.

“Either of those is going to have a negative impact on research universities, including Yale,” Salovey said. “We’re now developing estimates of what that impact is.”

The Yale School of Medicine, which accounted for 80 percent of the University’s grant and contract income in fiscal year 2012, co-authored a Feb. 11 letter to Capitol Hill along with more than 270 other organizations, protesting the impending budget cuts. School of Medicine Dean Robert Alpern said the NIH currently provides about $350 million in grants and funding to the School of Medicine, and the letter described the proposed cuts to NIH funding as “immediate and devastating.”

Alpern added he is “very worried” about the effects of the cuts, especially since NIH budgeting has not kept up with inflation in recent years, effectively decreasing the funding to Yale research about 20 percent since about 2003.

“The people I feel most concerned about are the young faculty and the faculty in general who rely upon these grants to develop their careers and do their research,” Alpern said.

Salovey said Yale will not be alone as it grapples with these cuts, but the reductions will pose challenges for future Yale STEM research.

“We’re looking at a situation in which research grant money is very hard to obtain in the first place, and squeezing it further only makes a career in the sciences that much more difficult,” Salovey said.

The University’s endowment is valued at $19.3 billion as of June 30, 2012.

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