A Market-Based Approach to New Mexico’s Lottery Scholarship Program

(Albuquerque) The Legislature will consider reforming the system during the upcoming 2014 legislative session. Several proposals have been made in the hopes of reforming New Mexico’s Lottery Scholarship program which plays such a large role in financing higher education in the Land of Enchantment.

In its newest paper, “Let’s Really Reform New Mexico’s Lottery Scholarships,” Paul Gessing, president of the Rio Grande Foundation, takes a broader look at the impacts, both positive and negative, of the Lottery Scholarship program and outlines some principles that legislators should adhere to in considering the program’s future. He also offers some approaches that might increase the positive impact of the program both on educational outcomes and New Mexico’s economy as a whole.

The paper includes:

  • A reminder of the tradeoffs and negative impacts of government-sponsored gambling;
  • Analysis of how New Mexico’s Scholarship program results in students “slacking off” in high school;
  • The scholarship discourages students from pursuing scholarships and other funding opportunities for their higher educations;
  • An explanation of why it might not be good public policy to encourage New Mexico’s best high school students to stay in New Mexico; and
  • How the Lottery Scholarship spurs price inflation among New Mexico’s institutes of higher education.

Gessing strongly discourages the Legislature from using General Fund revenues to prop up the Lottery Scholarship Program and cautions against over-emphasizing the use of grades in determining who keeps and who loses their scholarships.

Finally, Gessing encourages the Legislature to consider an innovative voucher-style proposal that, if adopted, would solve several of the problems inherent in the current, flawed model.

A Gessing argues, “The Lottery Scholarship Program has the potential to improve New Mexico’s work force. We believe that a healthy dose of market-based incentives could make limited lottery funds go further without tapping taxpayers for even more spending on higher education.”

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2 Replies to “A Market-Based Approach to New Mexico’s Lottery Scholarship Program”

  1. Excellent article! Here is our story about our recently graduated son.
    When our son was a high school junior preparing to go to college, we went to the college fair where we picked up all sorts of material from all sorts of colleges. We received literature from the University of Hawai’i at Manoa (UHM) because we thought he might be interested in their marine biology program and, gee whiz, it sure would be nice to visit Hawai’i once a year to see him!
    What we discovered was the WUE/WICHE “scholarship” program which allows students in western states to attend some college and universities in other states at 150% the residential rate, not at out of state rates, which is quite high.
    As it happened, our son was more interested in studying Japanese and Asia than marine biology and, among public institutions, Asian Studies and Japanese at UHM is highly rated. He graduated last May with a degree in Asian Studies with an emphasis on history of Asia and Japanese language; his minor was English. He was fluent enough in Japanese to travel there completely alone for six weeks. UHM was exactly the right school for him.
    The disturbing part of this saga is twofold.
    We were asked by solidly middle class parents, both professionals and who have a swimming pool could well afford to pay tuition, “”How does his lottery scholarship work with that?” Our answer was “It doesn’t. We are paying for his education the same way our parents did for us.”
    The second came from his high school’s “college counselor” who told him to disregard UHM because “your parents can’t afford that!” (How did she know our finances?) When I met with his counselor, she reiterated the affordability line and I told her to take a hike because she was clueless about our finances. (My husband and I were both highly paid professionals before moving here and taking lesser jobs but she did not know that.) The marvelous “counselor” also had never heard of the WUE/WICHE programs. I was stunned that I had to tell her about the program! (Who counseled whom?)
    If parents understood that they, not New Mexico, are responsible for educating their children, they might save money for college instead of building swimming pools and taking lavish vacations. (Our son had never been to Hawai’i until we visited the university.) Likewise, if parents knew more about the opportunities offered through WUE/WICHE, some students may elect to go to a school with programs they actually want to study.
    Our son would have learned very little Japanese language and Asian history staying in New Mexico! We certainly were fortunate to have gone to that college fair!

    1. Thanks for your insights Sharon. WUE is a great program, but it is a shame to limit New Mexico kids who may not be able to afford out of state college to in-state options unless they choose to take something in terms of a major that is not offered here. All students should be encouraged to look for the education that is best for them regardless of geography, not encouraged to stay in NM due to over-generous subsidy programs.

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