Governor signs higher ed trust fund into law

Among the bills Gov. Michelle Lujan Grisham signed into law this week was a measure aiming to secure tuition-free college over the long term.

Senate Bill 159, which passed the state House of Representatives (43-18) and Senate (37-5) during this winter’s legislative session, establishes a higher education trust fund and higher education program fund generating investment income for distribution to pay for tuition and fees at New Mexico post-secondary institutions.

The bill limits annual distribution from the fund to 5 percent of the average year-end market values of the fund over three years. As the fund is new, it will use the average for the preceding number of years until it is three years old. The first distribution, in fiscal year 2025, will be $47.95 million, per an amendment in the Senate Education Committee, and could increase to $52.4 million by 2032, with a potential balance of $1.069 billion at the end of the that year, according to a legislative analysis. 

The initial investment of $959 million into the fund makes New Mexico’s higher education trust fund the largest in the country, among eight states to establish such programs, according to the governor’s office.

New Mexico’s “Opportunity Scholarships” are available for students who reside in New Mexico and have graduated from a public or accredited private high school or earned a high school equivalency certification. Among the other eligibility requirements is a 2.5 grade point average per semester.

A legislative financial analysis estimated the 2025 cost of the program at $161.9 million.

In a news release, SB 159 sponsor state Sen. Pete Campos, D-Las Vegas, said the fund “will make it possible for New Mexicans to continue to go to college tuition-free for many years to come while also maintaining health reserves in the state’s Tax Stabilization Reserve Fund. Current and future students depend on these scholarships to further their education, and the future of our state depends on having more highly educated residents entering the workforce and providing for their families.”

The Higher Education Department reports 42,379 currently benefit from the scholarship, and that those students are statistically more likely to complete their degrees or professional certifications. The department also said that short-term career training certifications have increased 39 percent since the beginning of the program first proposed by Lujan Grisham, a Democrat, in 2019, with funding first approved by lawmakers in 2020.

The HED also estimated spring enrollment has increased 4 percent over last fall, and has increased by 7 percent overall since 2021.

In addition to the opportunity scholarships, lottery scholarships continue to cover tuition for approximately 10,000 students annually, the governor’s office said.