New Mexico reduces college scholarships funded by lottery

May 31, 2017 GMT

SANTA FE, N.M. (AP) — College scholarships funded by New Mexico lottery proceeds will cover 60 percent of tuition costs for the next school year — down from 90 percent — as state education officials announced changes Wednesday aimed at stretching revenue for the financial aid program.

The lottery-based scholarships help pay tuition for about 26,000 students at public universities, four-year colleges and two-year community colleges. While several states have lottery scholarships, New Mexico’s program provides a steep discount at one of the most affordable public college networks in the country.


Liquor excise tax revenue is being phased out after bolstering scholarship funding in recent years, and lawmakers have been left with few other options amid a budget crisis linked to a weak economy and a sustained downturn in tax revenue from the oil and natural gas sectors.

“The good news is that students still get over half of their tuition paid,” Higher Education Secretary Barbara Damron told The Associated Press in an interview.

Tuition assistance for students at New Mexico’s three research universities is decreasing by more than $700, to $1,721, in the fall. At community colleges, scholarships are shrinking from $617 to $432.

“We recognize how much of a burden that can be on families,” Damron said.

The Department of Higher Education is helping students fill out paperwork for federal financial aid.

Lottery proceeds for the fiscal year starting July 1 were expected to provide $39.5 million in scholarship funding, far short of the $68 million needed to pay for full tuition.

First-year, in-state students apply for the scholarship and can keep receiving it as long as they maintain a full course load and a grade-point average of at least 2.5.

Initiated in 1996, the scholarship covered 100 percent of average tuition rates until 2014.

Damron said lottery revenue has not kept pace with gradual increases in tuition and student enrollment.

Advocates for the scholarship worry that decreasing the awards could result in fewer students pursuing degrees. The state is one of the poorest in the nation, and some see higher education as a luxury.

Lottery officials have proposed making changes in the distribution of ticket proceeds to the scholarship fund in an effort to offer higher prize payouts to boost sales.

Critics of that idea say it would risk further reductions in scholarship funding by removing a requirement that 30 percent of proceeds go to students.


Tuition hikes were recently approved at four of the state’s seven main public colleges to help offset recent state funding cuts.

College presidents say the recruitment of students, faculty and researchers has been thrown into disarray by a standoff over budget issues between Republican Gov. Susana Martinez and the Democratic-led Legislature.

All college funding for the coming school year was vetoed in early April and restored last week during a special legislative session.