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LFC proposes fixes for lottery scholarship

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SANTA FE – The cash-strapped New Mexico legislative lottery scholarship program would get both short-term and long-term funding fixes under proposals endorsed by the Legislative Finance Committee.

To avoid having students’ scholarships cut during the 2014 spring semester, the LFC is proposing to allocate $11 million in immediate funding.

The state’s Higher Education Department had requested that amount for what is technically known as a supplemental appropriation.

Meanwhile, an additional $10.9 million in state money would be targeted to keeping the scholarship program afloat in the coming year – but that money would have strings attached.

Specifically, it would be allocated only if several structural changes to the program are enacted. Those changes include:

  • Capping scholarship awards at varying levels, depending on whether a student attends a two-year or four-year institution.
  • Increasing the minimum GPA requirement from 2.5 to 2.75.
  • Requiring a scholarship recipient to take at least 15 credit hours per semester, instead of 12 hours.

Rising juniors and seniors would be exempted from at least some of the changes due to a “grandfather” clause.

Currently, any New Mexican who graduates from an in-state high school with a minimum GPA is able to receive the scholarship, which covers 100 percent of their tuition – but not fees – for eight consecutive semesters. Students who receive a New Mexico GED are also eligible.

Due to its popularity and rising tuition costs, the lottery scholarship has faced growing solvency problems in recent years.

This year, the lottery program is expected to pay out about $67 million in revenue while only taking in about $40 million. The money to pay for the scholarship program comes from a percentage of state lottery ticket sales.

Meanwhile, roughly 18,500 students are expected to receive lottery scholarships during this spring semester.

“It’s going to have to be capped,” said Sen. John Arthur Smith, D-Deming, the LFC’s vice-chairman, during a Friday news conference. “It cannot be tied to tuition year after year after year.”

The proposals to reshape the lottery scholarship program will be introduced as a bill during the upcoming legislative session, according to LFC staff.

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