New Mexico's lottery scholarship set to receive $100M boost

Mar. 23—A state program that has struggled for years to provide tuition assistance to New Mexico college students is in line to get a $100 million shot in the arm.

The state budget of some $7.4 billion includes a massive, one-time injection of money into the state's Legislative Lottery Scholarship Program, which provides tuition assistance to eligible New Mexico college students.

The provision is contingent upon some $1.6 billion in expected federal funds coming into the state as part of the American Rescue Plan Act — which seems likely, said Sen. Nancy Rodriguez, D-Santa Fe.

"We are positive it's coming in," Rodriguez, vice chairwoman of the Senate Finance Committee, said of the stimulus money. The committee approved the measure to include those funds in the budget about 10 days before this year's legislative session ended on March 20.

The goal, Rodriguez said, is to use the money to fund 90 percent of tuition for students enrolled in that program.

The scholarship fund, which once covered 100 percent of tuition, currently pays an average of about 65 percent, though it varies based on the college attended, enrollment numbers and projected revenue. Students attending community college receive $380 per semester, while students at four-year comprehensive universities receive $1,020 per semester. Students attending research universities get $1,500 per semester.

Still, that might not be enough to help some students who see college as a stepping stone to success, Rodriguez said.

"There are a lot of students in New Mexico who cannot afford the tuition in college, especially going full time," Rodriguez said. "So they are forced to go part time or wait a year so they can work that first year to save money — and that shouldn't be the case. They should be able to go straight to college the moment they get out of high school."

University of New Mexico junior Reilly Holder estimated the scholarship fund is covering 67 percent of her tuition. She said the fund is "a safety net for students" who might otherwise not be able to afford college.

The news of the infusion of cash for the program could not have come at a better time, particularly as students deal with financial, physical and emotional impact of the pandemic, Holden said.

"This would definitely be the year to do it," she said. "I think a lot of people assume colleges are not impacted by COVID."

About 25,000 students currently rely on the lottery scholarship. By state law, 30 percent of the lottery's gross revenue goes to the scholarship fund. But with lottery sales declining, keeping pace with demand for the scholarship has been a concern for years because of increasing tuition rates, among other factors.

According to a 2020 New Mexico Lottery financial report, net lottery ticket sales were $127 million in 2020, a decrease of 11.5 percent from the previous year. Lawmakers have struggled for years to find ways to shore up the fund, first reducing the amount of the scholarship to cover 95 percent of tuition in 2014-15, and then to 90 percent in 2015-16, starting a regular decline in support.

Earlier this month, when lawmakers found they had an extra $373 million in revenue to work into the budget, they approved committing some $10.5 million of that new money into the lottery scholarship program. Another $11 million was invested in the state's Opportunity Scholarship Program, which gives residents the chance to attend college tuition-free.

But with federal stimulus dollars now factored into the equation "the additional funding means that tens of thousands of New Mexicans can access affordable higher education and will have more of their attendance-related costs covered by other means," said Stephanie Montoya, spokeswoman for the state Higher Education Department.

Holder, a Belen resident who is majoring in political science, said she's not sure she would have been able to afford going to college without the lottery scholarship aid.

"My career is going to be in social justice," she said. "You can imagine there's not much money in that. I may have still been able to go to college [without the scholarship money]. But would I have been able to pay back the loans that I would have taken out? I don't know."