Justice and Education Department officials continue to emphasize that under their interpretation of Title IX, the federal anti-discrimination law in education, schools that receive federal funding may not discriminate based on a student’s sex, which includes a student’s transgender status. The announcement is the latest in a controversial national debate about transgender rights in schools — which most recently includes the legal standoff between the administration and North Carolina over the state’s House Bill 2 that attempts to disallow transgender people access to bathrooms reserved for their gender identity. The guidance letter not only addresses the bathroom issue, but it also touches upon privacy rights, education records and sex-segregated athletics, saying that transgender students have the legal right to identify in school as they choose, according to CNN.

“Schools should let transgender students use bathrooms, locker rooms and other sex-segregated facilities consistent with their gender identity,” the guidance stated. “Staff should address transgender students by their preferred names and pronouns. Schools cannot require students to have a medical diagnosis, undergo any medical treatment, or produce a birth certificate before treating them consistent with their gender identity.”

Several state governors are unhappy about the guidance letter. Mississippi Governor Phil Bryant issued a statement on Friday, telling the Mississippi Department of Education to disregard the guidance. “The directive is nonbonding and does not carry the force of law,” Bryant said. “Because these decisions are better left to the states, and not made at the point of a federal bayonet, Mississippi’s public schools should not participate in the president’s social experiment.”

On the other side, LGBT groups supported the announcement, calling it a validation of transgender rights. "These groundbreaking guidelines not only underscore the Obama administration’s position that discriminating against transgender students is flat-out against the law, but they provide public school districts with needed and specific guidance guaranteeing that transgender students should be using facilities consistent with their gender identity," said Human Rights Campaign President Chad Griffin in a statement.
 

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The Budget Control Act of 2011, which developed an automatic 10-year process of “across-the-board” federal cuts if Congress failed to reduce federal deficit, will take its toll on financial aid and several grants that have eased tuition and fees for hundreds of thousands of students.
“In short, sequestration would have a negative impact on the education of our nation’s children and adults, reducing funding for teachers and other staff, cutting grants and work-study programs that help families pay for college, and potentially slicing payments to the contractors we rely on to administer our financial aid programs,” said U.S. Secretary of Education Arne Duncan in a testimony to the Senate Appropriations Committee.

According to Duncan, the Department of Education appropriated approximately $172 billion in grant, work-study and loan assistance to nearly 15 million college students.
If sequestration takes effect, the Federal Supplemental Educational Opportunity Grant would be hit with $38 million in cuts while $52 million would be cut from Federal Work-Study programs. The cuts would affect an estimated 104,000 students who benefit from the programs.

In his testimony, Duncan criticized the use of for-profit contractors in evaluating FAFSA processing, Pell Grant disbursement, loan originations, collections and other related tasks.

“The department’s ability to collect defaulted student debt and provide high-quality services to borrowers once they are out of school would likely be hampered by sequestration, due to possible cuts in contracts with private-sector entities,” Duncan said. “If we do not collect on loans, fewer funds will be repaid to the treasury and our deficit will increase. That is the opposite of what sequestration is supposed to achieve. It is another illustration of why sequestration is a bad policy.”

The Information for Financial Aid Professionals (IFAP) has released three statements with detailed information on how the sequester will impact student financial aid programs.

The Pell Grant will be unaffected by the sequester and origination loan fees for Direct Subsidized Loans and Direct Unsubsidized Loans will be increased by a minimal .05 percent. Direct PLUS Loans will see an increase from 4 percent to 4.2 percent.

“The department’s Federal Student Aid (FSA) office has begun developing the process necessary to implement the higher loan fees mandated by the sequester,” said David Bergeron, acting assistant secretary for postsecondary education and author of the statements.

The FSA will notify loan institutions with information on how their systems must be altered in order to comply with changes but in the meantime asks those institutions to “continue with their normal procedures.”

The Iraq-Afghanistan Service Grant Program, which provides funds to students whose parent or guardian died in the Armed Forces as a result of military service in Iraq or Afghanistan, may also be affected by the sequester, though the Department of Education is currently unsure of exactly how much will be reduced.

The Teacher Education Assistance for College and Higher Education Grant program, which serves students who intend to seek a career in teaching students from low-income families, is also made vulnerable due to sequestration. But again, the department was unable to make any amount estimates regarding cuts to the grant.

The sequester would also force the Department of Education to take several furlough days, which would further affect the processing and management of financial aid, Duncan said.

“The sequester also would likely require the department to furlough many of its own employees for multiple days. The full repercussions are unknown, but extended furloughs would significantly harm the department’s ability to prevent fraud, waste and abuse in the very large, complex student financial assistance programs,” Duncan said. “Furloughing employees also would hurt all the department’s other activities, including making grant awards on a timely basis.”

With its potential impact on the thousands of students who rely upon the services of federal financial aid and the Department of Education, the lasting effects of the sequester could ultimately lead to the country’s falling placement as a global competitor.

“The long-term impact of sequestration could be even more damaging,” Duncan said. “By reducing education funding now and in the coming years, it would jeopardize our nation’s ability to develop and support an educated, skilled workforce that can compete in the global economy.”

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