Students receiving the lottery scholarship can plan on an $800 tuition spike, pending the outcome of legislation in Santa Fe, according to Terry Babbitt, the associate vice president of the Enrollment Management Division.
For nearly 10 years, the lottery tuition fund has received a third of its funding from the taxation on liquor sales in the state.
June 2017 marks the end date for channel of funding, and without renewal, the scholarship will drop from 90 percent tuition coverage to 60 percent.
“We can’t let that happen,” said Nathan Cowan, ASUNM Governmental Affairs executive director.
Some representatives hope to extend the tax contribution to the lottery scholarship.
Democratic Rep. Carl Trujillo introduced HB 237 which, if passed, will extend the lottery scholarship contribution from the Liquor Excise Tax through 2020.
The lottery scholarship, formed in 1996, pays a percentage of tuition for students across the state, while the liquor excise tax began making contributions to the lottery tuition fund in 2006 to address increasing scholarship demand and decreasing lottery profits.
Trujillo said that with a decrease in scholarship money, “you would have many more students on the edge of not affording higher education. The end result will be fewer students educated.”
Trujillo also mentioned the bill may face pushback from legislators hesitant to pass spending increases amidst a budget deficit.
“Legislators do want to see this bill get passed,” he said, “but if there’s no money, there’s no money.”
He also added that getting the bill passed “is going to be difficult.”
Last Tuesday, HB 237 passed its first committee with a 7-0 vote, and now heads to the Taxation and Revenue Committee, where it will meet a Democrat majority.
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The bill — like all legislation — must pass through committee, be voted on by both the state House and Senate, and be approved by the governor.
Other legislation has taken aim at supplementing funds funneled into the lottery tuition fund.
One proposal — HB 250 — would add unclaimed lottery ticket prizes to the tuition pool. Estimates from the Fiscal Impact Summary portion of the bill cites an approximate $2.6 million in additional fund revenue.
Additionally, SB 276, though not specifically designed to increase revenue, looks to save some money by “backloading” the lottery scholarship — staggering the amount of tuition covered each semester for students advancing through their college careers.
According to the legislation, students would see 40 percent tuition coverage their first year, 50 percent the next two years, then 80 percent and finally 100 percent coverage for the last three semesters.
The strategy is a controversial method for cost savings with mixed reactions.
Supporters cite lower rates of interest accrued on scholarship money and an increased incentive to progress through school, while opponents say the cost-saving strategy exploits low retention rates and disadvantages poor or first-generation students.
Cowan noted budget shortfalls as obstacles for the legislation. For him, extending the contributions is a needed short-term answer.
“This is our band-aid while we learn to heal,” he said of the bill.
Cowan predicted more University budget woes if the legislation doesn’t approve the extension, citing lower in-state enrollment rates and an overall decrease in statewide education.
Babbitt said even if legislation to extend doesn’t pass, the lottery scholarship still provides good value.
“Current standalone lottery funding would pay approximately 60 percent of tuition. That is still an exceptional deal for New Mexico students when considering our already low-tuition compared to peers,” he said.
Babbitt, however, did mention the scholarship’s importance for UNM.
“It has helped keep students in New Mexico and many attending UNM,” he said, citing the $30 million yearly gift aid given to UNM students “which helps keep college affordable and student loan debt lower.”
Trujillo reiterated Babbitt, saying “the lottery scholarship is a proven program for the young men and women of New Mexico.”
He hopes to keep its funding at a maximum through his proposed legislation.
The bill has not yet been scheduled for vote in its next committee.
Brendon Gray is a news reporter for the Daily Lobo. He can be reached at news@dailylobo.com or on Twitter @notgraybrendon.
