GW has buffers in place in case Congress cannot reach a deal to stop the $85 billion in self-imposed federal spending cuts that will hit the country Friday.
While administrators are wincing at the budget slashes, which would shrink the pool of federal funds for research and student aid, GW has enough cash on hand to fill in holes, and pulled in more outside dollars for grants this year.
About 62 percent of GW’s research spending came from federal sources in 2010, the last year data was available. Federal research providers such as the National Institutes of Health would see a 5.1 percent funding cut, potentially holding up researchers’ project paychecks and making it tougher to secure funding.
The NIH is bracing for the hit, holding onto 10 percent of the funds it owes for multi-year research grants. Researchers’ success rates for grants could fall nationally from 19 percent to 14 percent if the cuts go through, according to the health lobbying group Research!America.
But Vice President for Research Leo Chalupa said earlier this month that while researchers could see delayed grant payments, large clinical trials and graduate training grants will likely be spared, because agencies can determine where cuts fall.
“If [sequestration] does happen, yes, there will be problems, but they’re not going to be catastrophic,” Chalupa said. “But yes, things will be bad, no doubt about it.”
The University has already beat the odds this year by increasing research expenditures amid squeezed budgets. For example, while the University of California drew 25 percent fewer research dollars this fiscal year. GW has seen 4.6 percent more.
The Columbian College of Arts and Sciences helped carry that increase. Dean Peg Barratt said she was not very concerned about the automatic cuts because the University is pumping out 44 percent more research proposals than last year, preventing a dip in the number of overall awards.
“We are really out there with our top-notch faculty making applications for funding. So even if your percentage shrinks, we’re out there with what I think are some really strong proposals,” Barratt said.
She added that the college “will find a way to keep people’s research careers moving forward” by increasing seed money for research. The University provided $1.3 million in start-up funds for new researchers this year.
But Akos Vertes, deputy chair of the chemistry department, said the cuts would disproportionately affect young researchers. He said he is working on a project backed by the Department of Energy, which could see funding shortages and pull money out from his graduate students.
“Hopefully, the University can provide bridging funds that tie us over of this situation,” he said. “But if these cuts become permanent or we don’t receive a grant or part of a grant, it can be an issue for those students.”
He added that he is unsure whether the NIH will award funding to another project of his “because they are uncertain about the financial situation.”
The sequester would also reduce federal work-study programs, prompting the Department of Education to make 33,000 fewer grants available.
In D.C. alone, about 510 students would get dropped from the work-study program and 500 low-income students would not receive financial aid.
Executive Vice President and Treasurer Lou Katz said the University has the financial flexibility to fill in gaps for research or federal work-study money. Its high levels of liquidity, with cash on hand levels higher than most peer institutions, would cushion the blow in case the economy spirals from sequestration, he said.
The average work-study award was $2,200 last academic year. When federal work-study funds dropped in 2011, the University upped its contribution to the 1,400 students in the program at GW. It now doles out 30 cents for every dollar of students’ paychecks.
“For the short run, its clearly manageable,” Katz said. “The biggest impact, potentially to the institution, is not the short run, but the long run. Not just to the institution, but to the whole country. If we go into a big-time recession, what’s the impact to the institution?”
Jeremy Diamond contributed to this report.