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Changes made in lottery scholarship system

New Mexico is providing more certainty for college students about the amount of financial aid they can count on from state lottery revenues, but elected officials and others say more needs to be done to shore up the scholarship program as higher education costs climb.

Gov. Susana Martinez signed legislation last week that decouples the value of lottery scholarships from the cost of tuition by setting a fixed amount for the awards based on the kind of institution a student attends.

Tuition and demand for financial aid have outpaced lottery revenues for nearly a decade, forcing lawmakers and university administrators to get creative about helping students fill the gap.

When it began in 1996, the scholarship covered 100 percent of average tuition rates. This year, only 60 percent is covered.

The lottery-funded scholarships help pay tuition for about 26,000 students.

Lottery forms fill a kiosk at an Albuquerque convenience store in May 2017

Lottery forms fill a kiosk at an Albuquerque convenience store in May 2017. Some say more needs to be done to shore up the lottery scholarship program. (Susan Montoya Bryan/Associated Press)

The two-term Republican governor warned that the measure approved by the Legislature during the recent session is just one step toward addressing the deeper issues facing the scholarship program.

“Until our elected officials act to overhaul the program, the legislative lottery tuition scholarship and our students will continue on their uncertain roller coaster,” Martinez wrote.

Several other states with lottery-funded scholarships have tightened eligibility or reduced the amount of the awards in recent years because of funding problems.

When ticket sales didn’t cut it in New Mexico, lawmakers turned to liquor excise revenues to fill the gap, but that funding was eventually phased out. They also changed eligibility requirements and the method for calculating the financial awards for each student. Still, costs have outpaced lottery sales.

Lottery officials have proposed higher prize payouts to boost sales. Critics say doing that would risk further reductions in scholarship funding by removing a requirement that 30 percent of proceeds go to students.

Fred Nathan, executive director of the Think New Mexico nonpartisan policy analysis group, backs the 30 percent requirement. He concedes that covering 100 percent of tuition costs again is unlikely, because tuition has risen steadily.

New Mexico State University Chancellor Garrey Carruthers and officials from other schools pushed for the decoupling of scholarship values from tuition costs. More than 4,400 students at Carruthers’ university benefit from the scholarship.

“This request originated from our students and their families,” he said. “They understood the scholarship could no longer cover all of tuition, and they felt a flat rate, instead of a moving percentage, would be easier for them to work with as they planned their finances.”

Advocates for the scholarship have worried that decreasing the awards could result in fewer students pursuing degrees. The state is one of the poorest in the nation, and some see higher education as a luxury.

At the University of New Mexico, students said they would continue pushing for legislation aimed at growing the revenue funneled to the scholarship fund.

“That is what is going to matter in the long term, guarantees from legislators that higher education is an investment in the state of New Mexico,” said Noah Michelsohn, spokesman for Associated Students of the University of New Mexico. “We’re not going to compete with these other growing economies such as Phoenix and Denver unless we start to graduate more students.”

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