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Legislature fails to fix scholarship shortfall

New Mexico is no closer to finding a more permanent solution to solvency problems with a vital program that provides college scholarships for tens of thousands of students through lottery revenues.

The Legislature wrapped up its regular session more than a week ago without passing any measures that would affect the program’s long-term bottom line.

Some have warned that the scholarships might only pay 70 percent of tuition starting next fall, but state officials are still crunching the numbers and it will likely be June before any decisions are made.

Tuition and demand for financial aid have outpaced revenues from lottery sales since 2009, forcing lawmakers to be creative. When ticket sales didn’t cut it, they turned to liquor excise revenues but now that funding is being phased out and the urgency is growing.

University and college presidents around the state are gearing up for a summer of brainstorming as they look for new ways to keep the program going.

Garrey Carruthers, president of New Mexico State University, said another approach is needed because lottery revenues appear to have plateaued and there seems to be little appetite for more gambling.

His university, for example, has introduced micro-grants to help students finish school. NMSU students also have suggested starting low and then increasing the scholarship’s coverage rate as they get further through school as an incentive and a way to save the program money.

“You’ll see a lot of new notions in the way of scholarship giving, combining scholarships and things of that nature,” Carruthers told The Associated Press this week. “But anytime you have to combine scholarships to make a good scholarship, that means a student or two are going to be left out.”

New Mexico is among several states that offer scholarships fueled by lottery revenues. However, the state is among the poorest in the nation and a place where higher education has been looked at as a luxury by some who have had a difficult time meeting eligibility requirements and rounding up needed financial aid.

At the University of New Mexico, administrators describe the scholarship as a key piece of financial aid that touches about one-third of the undergraduate population.

Annual tuition for a full-time, resident student at UNM is currently about $5,300. That means such a student could end up paying roughly $1,000 more if the lottery scholarship is reduced to 70 percent and universities can’t find the means to make up the gap.

University officials have said it’s too early to speculate on the amount of the scholarship going forward.

UNM Acting President Chaouki Abdallah said he’s looking forward to talking with fellow university presidents and the state Higher Education Department about ways to help as many students as possible.

Carruthers said New Mexico State University is in the midst of budget planning, and officials are contemplating whether they can help with the shortfall for their students.

During the legislative session, there were measures on the table that included rolling unclaimed prize money over to the scholarship fund as well as setting the award at a certain amount rather than a percentage of tuition.

Fred Nathan, executive director of the think tank Think New Mexico, acknowledged that those measures wouldn’t have solved the problem but said they would have reduced the gap between the demand for scholarships and the supply of revenue.

Nathan and university officials said it’s unclear how students will be affected next semester.

If anything, Nathan said: “This could create a groundswell and bring people to the table in a mood to compromise.”

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