New Mexico setting up $959 million trust fund for free college tuition
SANTA FE, N.M. (KRQE) — Nearly a billion dollars in taxpayer money, guaranteeing free college for generations of New Mexicans; that’s what the governor signed into law this week.
With the Lottery Scholarship and the Opportunity Scholarship, New Mexico has been investing in providing tuition to New Mexicans for years. But, what does this actually mean for New Mexico students? News 13 asked the experts.
“A lot of the times in New Mexico, we have a very negative story when it comes to education, but we’re moving in a positive direction in this administration,” said Stephanie Rodriguez, secretary for the New Mexico Higher Education Department.
Now, with an enormous first-of-its-kind investment, sponsor of the bill Senator Pete Campos (D-Las Vegas) sums it up: “This is going to be a game-changer for New Mexico.”
New Mexico students will find more money set aside for tuition assistance from the state.
“By creating this fund, New Mexico is keeping our original promise of tuition-free college for residents and cementing our status as the nation’s leader for college equity and access,” Governor Michelle Lujan Grisham said in a press release. “Our monumental investments from early childhood education to college and career are already making a life-changing difference for tens of thousands of New Mexicans and setting the example for every other state.”
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The state will move $959 million from the tax stabilization reserve fund into a trust fund set up specifically to pay for college tuition. The State Investment Council is tasked with investing the money and making distributions from the trust fund.
The fund was proposed in Senate Bill 159. The governor put her signature of approval on the bill earlier this week.
“The governor signed the New Mexico Higher Education Trust Fund. It is the largest Higher Education Trust Fund for tuition-free college in the nation,” Rodriguez said; all to fund tuition for college in perpetuity, according to Campos.
“Behind us is Tennessee at a little over 700 million. And then of course we have seven other states with similar trust funds, but those range from 33 to 400 million dollars. So nobody is even reaching the level that we are here in New Mexico in investing in tuition-free college,” Rodriguez said.
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Each year, lawmakers will allocate money from the trust fund to pay for scholarships and tuition at public colleges. The fund is scheduled to make its first payout of nearly $50 million on July 1, 2024. That money will go into a newly created Higher Education Program Fund.
“This is a landmark piece of legislation,” Campos said.
Lawmakers then have the ability to distribute those funds to cover public tuition as laid out in New Mexico’s laws (i.e., the money will flow through programs like the Lottery Scholarship).
“The $959 million that will be applied to this with fiscal year 25 seeing about $47 million of that coming in. Again when we really talk about an investment in education this is the bill that really ties things together with the Lottery Scholarship, with the Opportunity Scholarship,” Campos said.
Lawmakers approved $146 million in recurring funding for the Lottery Scholarship in fiscal year 2024, but the Legislative Finance Committee estimates the cost for fiscal year 2024 exceeds those appropriations by about $10 million.
The Lottery Scholarship covers roughly 10,000 New Mexico students. “We were the first state in the nation in 1996 to approve free college for recent high school graduates. We’re making history again and we’re doing it for any New Mexico resident and we are really seeing the return on investment,” Rodriguez said.
The Opportunity Scholarship, created two years ago, is funding more than 42,000 New Mexico students, and got $162 million this year. “We have seen a seven percent increase in enrollment since 2021 after a decade of declines. On top of that, certificates have seen a 39% increase,” Rodriguez said.
Rodriguez said these opportunities are benefitting New Mexico students across the board: “More than 60% of our students on the Lottery and Opportunity Scholarships are students of color. The primary demographic is Hispanic students, followed by White students, and then Native American students and then others.
“We are seeing more students of color, we’re also seeing that more women are receiving the Opportunity Scholarship and more Pell Grant recipients are also receiving the Lottery and Opportunity Scholarship.”
The governor said New Mexico is the first state to invest so heavily in education: a whopping $32.4 billion earmarked for Early Childhood and Higher Education.
“A couple of years ago, we established the Early Childhood Trust Fund, its mechanics is very similar to the Higher Education Trust Fund. That trust fund already has $5.5 billion. We also have the Land Grant Permanent Fund which is helping students in Pre-K through 12. That’s over $27 billion,” Rodriguez said.
“In the long run, what this is going to do, it is going to serve as the attraction, first of all, to keep our young people here at home, to keep the adult learners continuing with the process so that they go to school, they continue to better themselves,” Campos said.
To learn more about college tuition scholarship opportunities, visit the New Mexico Higher Education Department’s website here.
