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Saturday, December 20, 2014

UNMET v. EFC: Mapping the future of the Legislative Lottery Scholarship

lottery_graphic1
By Beatrice Verillo / New Mexico Daily Lobo

This graphic is based off of a series of scenarios provided to legislators by the New Mexico Higher Education Department. The scenarios are not proposals. They are guides to help legislators come up with a long-term solution to the Lottery Scholarship solvency problem this legislative session. The numbers that are being used to predict the impact of each scenario are for estimation purposes only and are not final in any way. Current lottery scholarship cost data from hed.state.nm.us.

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For the New Mexico Higher Education Department, the search for a solution to the Lottery Scholarship’s solvency issue might be in any of 32 offered scenarios.

The department has provided legislators with 32 solvency scenarios to help them decide how to answer the long-term question of funding the Scholarship.

In an email sent to the Daily Lobo, NMHED public information officer Chris Sanchez said the scenarios are intended to guide legislators in their decision about the Lottery.

“The 32 solvency scenarios serve as a crucial starting point for lawmakers as they discuss ways to protect the Legislative Lottery Scholarship,” he said. “More importantly, the scenarios show lawmakers the direct impact that different combinations of changes will have on the scholarship.”

The scenarios were divided into eight groups, each of which addressed an aspect of GPA and financial need. Sixteen of the scenarios calculated financial need based on unmet need, while the other 16 considered “estimated family contributions.”

Experimental numbers were then used for each scenario to assess the impact on different groups of students. The scenarios provided specific scholarship amounts based on a sliding scale, “rewarding a higher GPA and providing more support for those students with the most financial need,” according to the document.

New Mexico Rep. Jim Smith, R-Sandia Park, said that he and Sen. Jacob Candelaria, D-Albuquerque, used the scenarios to draft a bill on the subject. He said that, ultimately, they decided to base their bill on scenario E1, which would maintain the current 2.5 GPA standard.

“Jacob and I love to believe that there are a lot of students that are in that 2.5 to 2.75 range, that the Scholarship means a lot to them,” he said. “We want to protect those students.”

However, because the Scholarship is based on unmet need, Smith said the change would encourage students to seek financial help outside the Lottery.

“The Lottery was intended to be a scholarship of last resort, not a scholarship of first resort,” he said. “It requires college students to look for other scholarships as well.”

According to a document delineating the scenarios, scenario E1 would cover seven semesters of eligibility and require enrollment in a minimum of 12 credit hours.

Unmet need is calculated by subtracting expected family contribution, federal grants, non-Lottery state grants and scholarships from the institutional cost of attendance, according to the document. EFC is an indication of how much money the applicant’s family is expected to contribute annually toward the student’s tuition and fees.

Smith said his bill is still being drafted, but will likely be presented to legislators in the next few days.

Short-term Lottery solution

Legislators will also be asked to decide whether to completely fund Lottery students this semester.

The recommended funding amount from the Legislative Finance Committee will not be enough to cover this semester’s Lottery students, according to a document presented by NMHED to the House Appropriations Committee on Monday.

The LFC recommendation would fall $3.4 million short of covering costs for the scholarship this semester, according to the document. Students would have to pay back 10 percent of the award received in order to balance the deficit.

However, the executive recommendation would completely cover the costs of the scholarship.

“Governor Martinez supports using General Fund to fully fund the spring semester and urges lawmakers to work together in a bipartisan manner to find a balanced, long-term solution during this 30-day legislative session,” Sanchez said.

UNM’s Student Financial Aid Office has already announced that it will pay the Lottery deficit to compensate for student scholarships this semester. In an email sent earlier this month, the office stated that UNM will pay for the Lottery instead of requiring students to pay the difference for now because the University expects the government to provide the money in short order.

Smith said he supports using money taken from the General Fund to pay for the spring semester for the time being.

“We understand that it’s going to take some general fund money in the spring to meet the obligation,” he said. “We’re all OK with doing that, but I don’t think General Fund money was ever intended to be going to the Lottery Scholarship since the Lottery first came out. So, we don’t think that that’s a long-term solution.”