University of Iowa preparing for long-term government shutdown

Many veteran students will be eligible for short-term, interest-free loans

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Should Washington legislators continue to disagree on a deal to reopen the shuttered government and raise the debt limit, the University of Iowa will be ready.

UI officials have created an emergency short-term loan plan for students expecting government stipend checks on Nov. 1, in case the impasse in Washington, D.C., persists. Many of the affected students are veterans, and officials said keeping them in class and financially afloat is a top priority.

“We recognize that our veteran students depend on these stipends to help pay for housing and food for themselves and their families while they are attending Iowa,” said Joseph Brennan, vice president for UI strategic communication.

The government shutdown, which began Oct. 1 when Congress missed the deadline for funding it, so far has had a minimal effect on UI students, staff and faculty members, according to Brennan.

But if a continued impasse keeps non-essential government workers and services unavailable into November, UI student veterans, researchers and some patients and providers at the UI Hospitals and Clinics could take a hit, Brennan said. Federal payments to the UI for student aid, research projects, FEMA grants and health care-related costs could be delayed.

The UI can’t bridge the federal funding gap in all those areas, Brennan said, but it will do what it can to keep students financially stable and maintain support for UIHC providers and patients.

Mark Warner, UI assistant provost and director of financial aid, said as many as 530 student veterans attend the university and are expecting to see a government stipend for living expenses on Nov. 1.

That stipend is as high as $1,475 for many of those students, and Warner said the UI will offer them a loan should the government fail to fulfill its commitment.

“The staff has worked out a plan so that these veterans would be held harmless from an ongoing shutdown,” Warner said.

The UI’s plan is to transfer the amount the veteran students otherwise would receive from the government into their university accounts on Nov. 1. The expectation, Warner said, is that the government would eventually reopen and pay those students what they’re due.

The students then would be responsible for paying back the short-term loan to the UI, according to Warner.

“No interest would be charged to the student,” he said. “The idea is that they would get the money they are due from the government, and they would be able to pay us back.”

Warner said the students could choose to pass up the loan opportunity or take part of it.

“If they don’t want this loan, they don’t have to take it,” he said. “We just want to hold them harmless from the shutdown.”

Warner said the UI has a full expectation that the government shutdown will be resolved by Dec. 1, and the veteran students will receive two months of benefits at that time – one for November and December. The students would have until Dec. 22 to pay back the UI loan, he said.

Outside the group of veteran students owed government money, Warner said, the UI is aware other students might be relying on federal checks come November. They too are encouraged to contact the financial aid office, he said.

“We will see if we might be able to assist them with a similar type of program,” he said.

The UI funds for the loan program will be pulled from its “emergency short-term loan” funds. UI Executive Vice President and Provost Barry Butler said no students have come to administrators yet with concerns about stalled federal funds.

“The main goal is to make sure that students’ education doesn’t get interrupted as a result of this thing,” Butler said. “We want to make sure their lives aren't disrupted.”

The ongoing government shutdown, now in its third week, also is negatively affecting UI researchers. On a daily average, the UI processes nine research grant applications, totaling $2 million.

Because many new proposals can’t be submitted to the shuttered funding agencies, the UI is holding about 55 new grant applications, said Jennifer Lassner, UI assistant vice president for research.

“It means everything is going to be delayed,” Lassner said.

In addition to new proposals, Lassner said, peer review sections scheduled this fall for already-submitted UI grant applications have been postponed.  Those have to be rescheduled, and that could cause delays into the spring and summer, she said.

“We will be feeling the impact well into 2014,” she said.

UI researchers working with federal grants so far have not received “stop work” orders, Lassner said. But, she added, some will be looking for continuation awards at the end of this month.

“If the government isn’t operational soon, it might have more of an impact on our current operations and research,” she said.

Should federal funding issues threaten to stall UI research projects, Lassner said, UI officials could consider providing some “bridge” funding to keep them up and running. That hasn’t been decided, she said, but it’s a definite option.

“When you put together a group of skilled people in a lab, you want to keep them going,” Lassner said. “You don’t want them to disband because of a funding issue.”

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