Lottery Scholarship Funding Solid for Years to Come
By Reed Dasenbrock
Secretary of Higher Education
As the state Higher Education Department is responsible for receiving the revenues from the New Mexico Lottery and distributing them to state colleges and universities for the Legislative Lottery Scholarship, I was more than a little surprised to see a headline, "Lottery Sales Hurt Students."
Let me assure the citizens of New Mexico that no students have been hurt by the "dip in revenues" reported Feb. 25 in a front-page story in the Journal. No one from the Journal contacted us about the story, but if they had, we would have been able to report that every year from the beginning of the Legislative Lottery Scholarship in 1997, the number of lottery awards has risen, as has the financial value of those awards.
In 2006-2007, 16,694 New Mexicans received Legislative Lottery Scholarships, and the total value of those scholarships was nearly $36 million.
As has been the case since it began, everyone eligible for a scholarship received one, and everyone received the full amount to which he or she was entitled. So I can't see anyone hurting here: the Legislative Lottery Scholarship has helped nearly 50,000 New Mexicans and their families afford a college education.
Why this has been such a public policy success is that it matches the best current research about how to keep students in school. We know that students are far more likely to graduate from college if they go straight on from high school to college, and students who take even a semester off or even go part time for a short period of time are less likely to graduate.
Studying is a habit, and good habits are a matter of daily routine, not a matter of a month on and a month off. This is particularly true for students who come from low income families or who are the first in their family to attend college: once they leave school, it is much harder to get them to go back.
So the features of the Legislative Lottery Scholarship that have given rise to some criticism, the fact that to be eligible one must go straight on from high school to college, one must be continuously enrolled, and one must go to school full time, are all part of why the program has been such a success.
It is the case that there has been a slight dip in revenues: In 2005-2006, the lottery made a record profit. Fiscal year 2006-2007 was slightly less profitable, and the lottery paid about $2 million less to the Legislative Lottery Scholarship fund.
This is a concern, as obviously New Mexicans have to continue buying tickets for there to be a Legislative Lottery Scholarship. But it cannot be said to be an immediate concern as since the beginning of the lottery, profits have exceeded the immediate payout.
We entered the 2006-2007 academic year with an extremely healthy carryforward balance of just over $60 million, and we ended the year with that balance being just over $59 million. Therefore, if current trends continue, with the balance being spent at a rate of $1 million a year, the Legislative Lottery Scholarship is sustainable for another 60 years, until 2067. If only Social Security or Medicare or Medicaid were in this dilemma!
In addition, the Legislature in 2007 increased the payout percentage from the lottery to 27 percent this fiscal year and 30 percent in the coming fiscal year, which should put additional resources into the funds which will be needed as more New Mexicans attend and graduate from college.
The citizens of New Mexico should be confident that the funding for the scholarship is in very good shape, and students should be confident that the scholarship will be there for them when they graduate from high school.
What is so distressing about this kind of press coverage is that it sends the wrong message to young people and their parents about the affordability of college.
Young people today overwhelmingly understand that they need advanced, postsecondary education to succeed in the knowledge-based economy of the 21st century, but when asked how much college costs, they come up with wild overestimates.
We need to make sure students understand both what a relative bargain tuition at the public colleges and universities in New Mexico is and what resources are offered in order to allow all New Mexicans to attend a college or university. Anyone who wishes to attend college is able to afford it; everyone who wishes to attend college should plan on doing so.
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