Governor pitches plan for free college

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Copyright © 2019 Albuquerque Journal

Free college for all New Mexicans.

That’s what Gov. Michelle Lujan Grisham proposed Wednesday morning at a higher education summit at Central New Mexico Community College. The New Mexico Opportunity Scholarship would cover the tuition gap left after a student receives financial aid, grants and scholarships, including the New Mexico Lottery Scholarship.

And it would be available to students regardless of family income. State lawmakers would need to sign off on the proposal.

“Let’s make it free,” Lujan Grisham said in announcing the proposal. “Here’s the moonshot for higher education.”

The announcement earned Lujan Grisham a standing ovation in the auditorium at CNM, where hundreds of people, including leaders at New Mexico universities, had gathered to listen.

Students would be able to use the scholarship to pay their tuition and fees at any public higher education institution in the state. The administration is estimating that 55,000 students would use the scholarship each year, and that the program would cost the state between $25 million and $35 million each year.

“It’s a cheaper program than it would be in most states because we have significant financial aid infrastructure already built into the state budget with the Lottery (Scholarship) and the high Pell (Grant) usage,” said state Higher Education Deputy Secretary Carmen Lopez-Wilson. “And then the factor that our tuition across the board is really low in this state. I think those are the two major factors that make this affordable and realistic.”

For traditional students, the Opportunity Scholarship could be used during a student’s first semester of college before the Lottery Scholarship starts paying for their education, Lopez-Wilson said. The scholarship would also cover tuition and fees at two-year community colleges for adults who want to return to college, she said.

The initiative will put New Mexico and Lujan Grisham, a Democrat, at the front of a popular issue for progressive candidates nationwide. Many of the Democratic candidates for president have unveiled various proposals for tuition- or debt-free college. New Mexico would join New York as the only states to offer tuition-free college, according to the Governor’s Office.

The requirements of the Opportunity Scholarship would mostly mirror those in the Lottery Scholarship. Students attending a four-year university would have to take a full course load, start college within 16 months after graduating from a New Mexico high school or earning the equivalency, and maintain a 2.5 grade-point average, Lopez-Wilson said.

The governor will ask the Legislature to use the state’s general fund to pay for the scholarship. Other scholarships administered by the state Higher Education Department are paid for in a similar way, Lopez-Wilson said.

Lujan Grisham said she hopes the scholarship will be in effect next fall.

‘Devil in the details’

After several cash-lean years, New Mexico revenue levels have soared to unprecedented levels, due primarily to an oil drilling boom in the state’s southeastern corner.

State lawmakers will have an estimated $907 million in “new” money available in the coming budget year for spending on public schools, roads, health care and other programs, according to new revenue estimates released last month.

In addition, the state is on pace to have nearly $2.3 billion in reserves at the end of the current budget year, giving legislators options for possible one-time cash infusions.

State Sen. John Arthur Smith, D-Deming, chairman of the Senate Finance Committee, said he will want to know how the state plans to pay for the scholarship in years when oil and gas revenue declines.

“The devil is in the details of all wonderful programs. The temptation is even more encouraging when you get oil and gas revenues. But if those revenues disappear, you need to sustain that effort,” he said. “My knee-jerk reaction is that I want to know more about the details. … All in all, it’s a wonderful idea, but the devil is in the details. And my committee wants to know how do we pay for this on a sustained basis.”

Some economists have cautioned legislators about the historic volatility of the oil and natural gas industries, and the state’s reliance on them for budget-balancing purposes. Oil- and gas-related revenue now represents roughly 35% of the state’s direct revenue base, while making up about 75% of the state’s revenue growth from the 2018 to 2019 budget years.

Already, lawmakers were forced to make changes to the lottery scholarship program in 2014 – and again in 2018 – as tuition levels and scholarship amounts were surpassing revenue from lottery ticket sales.

Those fixes included requiring students to take more credit hours and unhitching 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.

Smith, who has served in the Legislature for 30 years, pointed out that there were unintended consequences when the state created the Lottery Scholarship in 1996 that could appear again. Those consequences included a sudden increase in enrollment at the research institutions in New Mexico – the University of New Mexico, New Mexico State University and the New Mexico Institute of Mining and Technology – and enrollment drops at some of the other higher education institutions. He also noted that there were a large number of college dropouts when ill-prepared students went to college on the Lottery Scholarship.

“There’s a lot more that needs to be uncovered on this issue, but all in all I think it’s a wonderful idea,” he said.

Senate Minority Leader Stuart Ingle, R-Portales, who helped pass the 1996 legislation that created the Lottery Scholarship program, said the Senate will closely scrutinize the governor’s proposal.

“I just think we need to be really careful when we start talking about some of those things,” Ingle told the Journal.

He said he had not yet seen all the details of Lujan Grisham’s plan, but said many New Mexico colleges and universities in the past took advantage of the Lottery Scholarship program by raising tuition levels.

“There’s nothing that’s free – somebody is paying for it somewhere,” Ingle said.

‘Big, bold ideas’

Representatives of the oil and natural gas industries were quick to point out that the revenue from the extraction industries is making the governor’s free college proposal possible.

“Big, bold ideas like this are the type of transformational opportunities New Mexico now has because of the success and growth of the oil and natural gas industry. This is a great example of how the Governor can leverage increased oil and natural gas production to the benefit of all New Mexicans regardless of where they live, work, or go to school,” Ryan Flynn, executive director of the New Mexico Oil and Gas Association, said in a statement.

“Our state has enjoyed two consecutive billion-dollar budget surpluses on the strength of oil and natural gas, and we’re committed to continuing our role as the economic foundation of New Mexico while safely and responsibly producing the energy we need.”

Aides for the governor said the scholarship will be affordable because it adds to existing scholarship and financial aid sources. Students who graduate from a New Mexico high school would apply to a college of their choice, and a financial aid officer would put together the federal and state aid funds that the student qualifies for. The new scholarship would then cover any remaining gap, said Lopez-Wilson, the deputy higher education secretary.

Magnet for families

UNM Regent Kim Sanchez Rael said the scholarship would help students attend college and make New Mexico an attractive place to live for growing families.

“I see it as a real magnet to build the entire workforce and to bring growing families into New Mexico. We’ve had an exodus of young families and now we can have this great magnet to bring people back, be part of our workforce and continue to build our economy in the state,” she said. “If you think of the … ripple effects of an initiative like this – it’s a win for the business community, employers, families. I think it can be transformative. Not only for the education of students, but also for the broader economy of our state.”

CNM President Katharine Winograd said the school looks forward to being part of the governor’s proposal.

“Years ago, a free, public high school education was enough for many people to get a good, middle-class job and support a family. Those days are gone. In addition to graduating high school students, we’re excited that the proposal includes adults who are returning to school to improve their job prospects,” Winograd said in a statement. “We need more college graduates in New Mexico to improve the prospects for families and our economy, and reducing the financial burden on students is a key step. We’re grateful that Governor Lujan Grisham is taking on the challenge.”

Journal Capitol Bureau Chief Dan Boyd contributed to this report.

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