SANTA FE, N.M. (AP) — New Mexico would eliminate tuition and fees for in-state undergraduate and community college students of all ages under a proposal Wednesday from Democratic Gov. Michelle Lujan Grisham that requires legislative approval.
The "opportunity scholarship" would tap the state general fund to cover costs not already paid for by federal scholarships and local lottery proceeds, a so-called last dollar approach used by a handful of states including New York that offer more limited free tuition.
The announcement at a community college in Albuquerque thrusts New Mexico to the forefront of a national political conversation about soaring student debt and tuition costs.
"By making college significantly more accessible to New Mexicans of every income, of every background, of every age, we are putting students first," Lujan Grisham said in a statement. "We are creating meaningful opportunity for all."
Free tuition would be available at continuing education programs for older students who return to school but not for graduate studies such as medical or law school.
Approval by the Democrat-led Legislature is needed to tap general fund dollars to cover tuition.
New Mexico's general fund is bulging amid an oil production boom. General fund revenues during the coming fiscal year are forecast to exceed annual spending commitments of $7 billion by about $900 million.
But state economists say that government income in New Mexico is increasingly vulnerable to possible downturns in the oil and natural gas sectors. Modern oil exploration and drilling techniques have unlocked enormous reserves in the Permian Basin that straddles parts of West Texas and southeastern New Mexico.
When oil prices and local petroleum production plunged in 2016, New Mexico slashed funding to its public universities and specialty schools by 5% to close a budget gap, under former Republican Gov. Susana Martinez.
State Sen. John Arthur Smith, the Democratic chairman of the lead Senate budget committee and University of New Mexico graduate, had an upbeat reaction Wednesday to the free-tuition proposal — moderated by concerns about the sustainability of state funding for tuition.
"Conceptually it's a great idea," he said. "But I've got a lot of good ideas. I just don't know how to pay for them."
Lujan Grisham said her administration would lead efforts to increase applications for federal student aid to rein in state costs.
She hopes free tuition will lead to improved economic growth by gradually creating a better trained and compensated workforce.
Poverty rates in New Mexico are the highest in the American West, and only two states nationwide have a higher unemployment rate. Lawmakers are wrestling with ways to keep young professionals from leaving the state for thriving nearby economies in Colorado, Utah and Texas.
New Mexico would spend an estimated $25 million to $35 million annually to offset tuition and fees at its 29 public colleges, universities and trade schools, according to the governor's office.
Students with a high school or equivalency diploma who meet a minimum grade point average would be eligible. An estimated 55,000 students would receive some benefit.
In-state tuition and fees at the Albuquerque-based University of New Mexico is listed at $7,556 for the current academic year. In-state tuition is about $5,500 at regional non-research schools such as New Mexico Highlands University in Las Vegas, N.M. State lottery proceeds already reduce tuition costs for many in-state students to 40% or less of the full price.
Nationwide, more than 20 states already cover tuition at two-year community colleges. New York currently provides tuition-free access to public four-year degrees with some restrictions, and New Mexico's proposal as initially outlined would be more expansive by including older returning students with no exclusions based on income.