It’s time to finally do lotto scholarship homework

When New Mexico lawmakers get to the assignment of making the 20-year-old Lottery Success Scholarship solvent, they have at least four options to consider:

A. Continue to raid other dedicated revenue streams by the tens of millions of dollars so the fund can continue to cover 90 percent of tuition. In previous sessions, funds from the Tobacco Permanent Fund and the alcohol excise tax have been redirected to keep the scholarships funded at close to or at 100 percent of tuition.

B. Let the scholarship fund provide what it can to applicants based on lottery revenues, which was 100 percent of tuition in 1996, dropping to 90 percent in the 2015-16 school year even with supplemental revenue, and is on pace to cover just 60 to 71 percent in the coming school year unless it is propped up again.

C. Change eligibility for the program by removing the minimal 2.5 GPA and supplanting scholarship merit with income need.

D. Change eligibility for the program by increasing academic requirements above maintaining a 2.5 GPA, essentially a “C+” average.

Those choices really hinge on what lawmakers believe the fund should be. The Journal has long argued for all government programs to live within their means, and for the Lottery Success Scholarship to live up to the scholarship part of its name.

Following that line of thinking, lawmakers should work with options B and D, providing what the program can to students who are actually ready for and dedicated to getting a higher education.

Back in 1996, the lottery scholarship program was sold to New Mexicans as a way to make legalized gambling palatable, with a good portion of the revenues (now 30 percent, with most of the incoming money going back out to winners) paying for New Mexico kids to get degrees from New Mexico colleges and universities. In the ensuing years, the program has become a victim of its own success, with 109,983 scholarships handed out to date but just 53,511 diplomas.

Budget realist Sen. John Arthur Smith, D-Deming, chairman of the Legislative Finance Committee, says covering 60 percent of tuition is still “a pretty good deal.” He’s right — if you knew nothing of the program’s history and someone said that you could get more than half of your tuition paid for, you’d be thrilled.

But if you are expecting to pay, say, $300 a semester in tuition at the University of New Mexico with the scholarship and instead get hit with a bill for $1,000, you are not going to be happy and might be re-thinking your decision to enroll. Throw in $832 a semester in fees, plus books and room and board, and college could very well be a gamble you can’t afford to take.

With limited funds it makes sense to heed the advice of the LFC and establish new eligibility requirements that have more to do with scholarship and award students whose academic records warrant it. A 2010 LFC report recommends linking scholarship eligibility with predictors for graduating, and another says “raising admission standards is directly correlated with improved graduation rates” and “each additional point in the average ACT of incoming freshmen increases graduation rates by five points.”

Yes, everyone can benefit from college work — even if they don’t earn a degree. If there were unlimited funds available, we wouldn’t be having this debate. Also, there are needs-based programs, including Pell grants, designed specifically to help low-income students cover the cost. While means testing for students from wealthy families is a possibility here, there is a definite lack of non-lottery help for those solid students who come from hard-working middle-income families, and there are only so many academic scholarships to go around. If these students lose the lottery, they will have to pick between the huge financial burden of borrowing a ton of money they will struggle to repay and skipping college, no matter how good their transcripts look.

Yes, the lottery authority should send its unclaimed prizes into the scholarship account, but that estimated $2 million a year is a drop in the shortfall bucket. No, the lottery should not expand its sales pitch to gas pumps, considering almost half the state’s residents are on Medicaid and one in four is on food stamps.

First and foremost the Lottery Success Scholarship program should target its awards to students who are ready not only to attend but ultimately graduate from college.