After a long political standoff, on Jan.1, lawmakers in Washington reached a deal to avert the so-called fiscal cliff.
With the new bill, current tax rates will be permanently extended for individuals making $400,000 per year or less, while higher earners will see their tax rates go up three percent, according to a summary put out by the U.S. Senate. Among other provisions, the American Opportunity Tax Credit was also extended through 2017, which gives a tax credit based on college tuition and other expenses, according to the summary.
Still unsettled is the question of the mandatory spending cuts, which were set to go into effect Jan. 2 but have been pushed back two months by the bill, leaving the future of many government funded programs in question, including student financial aid.
“We just don’t know what will happen,” said Kevin Multop, Director of the Financial Aid Department at Central Oregon Community College.
This year nearly 500 students have received Supplemental Education Opportunity Grant money, and 66 students are taking part in the Work Study program, according to Multop. Both of these programs could be affected by mandatory spending cuts.
“It would mean less resources, that’s for sure,” said Multop, who is hesitant to speculate. “In my experience, the laws are always changing, and speculation can cause confusion,” said Multop. “It’s just too early to know how this may affect our students.”