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Lottery scholarship coverage falls to 60 percent

ALBUQUERQUE, N.M. — Thousands of New Mexico college students could be headed for sticker shock.

The state’s legislative lottery scholarship will offer significantly less help for the 2017-18 school year, covering an average of 60 percent of qualifying students’ tuition at New Mexico institutions. That’s down from 90 percent in 2016-17.

The diminished coverage, announced Wednesday by the New Mexico Higher Education Department, reflects both rising tuition costs and shrinking revenues.

Most New Mexico public colleges and universities have approved tuition increases for the 2017-18 school year, including the University of New Mexico.

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At the same time, the scholarship funds have fallen. The New Mexico Lottery – which is required to put 30 percent of its revenue into the scholarship pot – has had less to contribute. Its transfers to the program this year have fallen by $7.6 million, or about 20 percent, according to the most recent reporting. While state leaders approved using liquor excise tax revenue to subsidize the program for two years, that flow ends this summer.

Higher Education Department Secretary Barbara Damron

Higher Education Secretary Barbara Damron said the lottery scholarship program will have an estimated $42 million in revenue for the 2017-18 academic year. It spent about $58 million in scholarships in 2016-17.

“It’s still a very good deal. Our students are getting over half of their tuition paid. Most states don’t offer that for their students,” Damron said. “But I certainly recognize it’s hard to go from having something paid completely to paid less.”

The scholarship paid 100 percent of tuition as recently as fall 2014. It dropped to 90 percent in 2015-16.

The scholarship aids about 26,000 students annually, according to HED. UNM has the most recipients, with approximately one-third of undergraduates at the state’s largest university benefitting.

With the change, UNM lottery scholarship recipients could see their out-of-pocket costs rise $1,600 annually, according to early estimates.

Noah Brooks, president of UNM’s undergraduate student government association, said he was disheartened that New Mexico lawmakers did not prioritize a scholarship fix this year.

“So many thousands of students rely on the lottery scholarship, and I’m disheartened that nothing came to fruition,” Brooks said, noting that UNM students already are facing rising tuition and fees.

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New Mexico State University has not yet set its tuition for 2017-18, but administrators are recommending an increase. Only three New Mexico public institutions are not raising tuition for 2017-18, according to HED, though Damron noted that New Mexico rates are generally low compared to peer institutions and schools in neighboring states.

UNM’s 2016-17 tuition and fees, $6,950 for in-state students paying full price, ranked as the third-lowest among 23 peer institutions, according to an administrator’s report to the school’s regents last week.

“This is definitely a big, but not unexpected, change that will significantly impact some of our students. While we would be making every effort to provide those students with the most need all the financial assistance we can muster, we remain convinced that 60 percent support from the Lottery scholarship for the quality of education provided by UNM is a great opportunity,” UNM interim President Chaouki Abdallah said in a written statement.

The Council of University Presidents, an association representing New Mexico’s seven four-year institutions, will formulate recommendations for 2018, Executive Director Marc Saavedra said.

The state’s larger budget crisis commanded elected officials’ attention this year and made it difficult to find extra money, Saavedra said. But a long-term plan to bolster program funds is needed or he said scholarship coverage could continue dwindling.

“It’s possible you could start looking at that (diminishing value) every year, unless we do something about the revenue situation of the lottery,” he said. “I don’t have any suggestion at this time; it’s just something we need to seriously look at.”

While Damron and other officials have for months warned scholarship coverage was likely to fall significantly in 2017-18, New Mexico State University student government President Kevin Prieto said he expects the news to catch many of his peers by surprise since they don’t all follow the news.

Prieto, a lottery scholarship recipient, said many New Mexicans choose to stay in state for college because of it. He fears the change might lead many to pursue other options elsewhere.

“I did look at different schools out of state,” said Prieto, a Las Cruces native. “The lottery was the one (factor) that nailed it down for me.”

New Mexico high school graduates qualify for the scholarship after their first semester of school at a state institution if they take at least 15 credit hours and maintain a 2.5 grade point average. Lawmakers this year approved extending the scholarship to students who take a year off between high school and college.

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