Lottery scholarships to fund about 90 percent of tuition

Despite rising tuition rates at more than a dozen colleges and universities in New Mexico, state higher education officials say about 90 percent of eligible students' tuition costs will be covered next year by lottery scholarship funding.

Still, officials are warning that without reforms, the scholarship program will be affected.

"It's important that lawmakers find a long-term solution to ensure that the Legislative Lottery Scholarship continues to support New Mexico students for many years to come," said Joe Cueto, a spokesman with the state Higher Education Department. "We continue to encourage lawmakers to find a balanced fix to the scholarship that has a minimal effect on students."

Participation in the program has grown exponentially since it began two decades ago. Now, more than 30,000 students receive the scholarships.

Higher Education Secretary Barbara Damron recently wrote to university officials to outline the funding amount that will be available for recipients for the upcoming fall and spring semesters. It's based on calculations of historical and projected revenue estimates from tax officials and the New Mexico Lottery Authority.

Annual revenue from ticket sales has plateaued at about $40 million, while tuition costs for eligible students are closer to $60 million a year, according to state higher education and lottery officials.

While enrollment at higher education institutions has dropped by about 5 percent statewide, Damron said 15 colleges and universities have boosted tuition rates for the next school year. That affects the tuition average and thus the percentage of the award.

At the University of New Mexico, one of the state's largest institutions, officials say 93 percent of tuition will be covered for eligible students — or up to an estimated $2,465 per semester for main campus students. Nearly half of the university's 17,000 full-time undergraduate students get the lottery scholarship.

Several other states with lottery-funded scholarships have been forced to tighten eligibility or reduce the amount of the awards in recent years because of funding problems.

New Mexico is no exception. In 2014, additional funds were allocated to the program, eligibility requirements were altered and the method changed for calculating the full dollar award for each student.

While the program saw some initial benefits from the changes, Damron said in her letter the demand for the financial assistance continues to outpace lottery funding.

If nothing is done, officials have warned that students could face a 30 percent reduction in their scholarships starting in fall 2017.

Lawmakers are expected to weigh options during the next several months before proposing another round of measures aimed at addressing the scholarship program's solvency during the next legislative session in January.

Proposals that have been floated include everything from raising the grade-point average to qualify for scholarships to shifting the merit-based system to one that focuses more on lower-income students.

Source: Lottery scholarships to fund about 90 percent of tuition