Michelle Lujan Grisham signs $959 million Santa Fe college tuition fund

Gov. Michelle Lujan Grisham signed Senate Bill 159 into law in Santa Fe this week. The measure sets up a $959 million trust fund to guarantee free college tuition for state residents. The first payout will happen on July 1, 2024.

Money will move from the tax stabilization reserve fund into the new trust fund. The State Investment Council will invest the principal. The agency will also oversee payouts.

Higher Education Department Secretary Stephanie Rodriguez praised the new law.

“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.

The trust fund will support college tuition indefinitely, according to Sen. Pete Campos. Campos sponsored the legislation.

“This is going to be a game-changer for New Mexico,” Campos said.

Tennessee holds a similar trust fund of a little over $700 million, according to Rodriguez. Seven other states run trust funds ranging from $33 million to $400 million, Rodriguez said.

Lujan Grisham discussed the broader education effort in a press release.

“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,” Lujan Grisham said. “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.”

The state has directed $32.4 billion into early childhood and higher education, the governor said. The Land Grant Permanent Fund holds over $27 billion for younger students, Rodriguez said. The Early Childhood Trust Fund contains $5.5 billion, according to Rodriguez.

The new fund will send nearly $50 million to the Higher Education Program Fund on July 1, 2024. Campos said fiscal year 2025 will see about $47 million coming in.

“This is a landmark piece of legislation,” Campos said.

Lawmakers will allocate money to public college scholarships from the fund every year. Dollars will move through existing state programs. These include the Lottery Scholarship and the Opportunity Scholarship.

The Lottery Scholarship aids about 10,000 students. Lawmakers approved $146 million in recurring funds for the program for fiscal year 2024. A Legislative Finance Committee estimate shows fiscal year 2024 costs exceed appropriations by about $10 million.

Rodriguez pointed to state history with the program.

“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 state created the Opportunity Scholarship two years ago. The program received $162 million this year and funds over 42,000 students. College enrollment rose seven percent since 2021, Rodriguez said. Certificate programs saw a 39% increase.

Rodriguez gave details on the student groups receiving money.

“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,” Rodriguez said.

Rodriguez added that more women and Pell Grant recipients are receiving the Opportunity Scholarship. Campos said the fund will keep young people and adult learners in the state.

Public universities in Santa Fe and across the state receive state funding allocations through legislative action. State trust funds invest capital reserves to yield returns for public programs over time. Agencies then distribute those earnings under guidelines set by statutes.

Information on tuition awards remains available on the New Mexico Higher Education Department website.