Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

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F I S C A L I M P A C T R E P O R T

SPONSOR Foley

ORIGINAL DATE

LAST UPDATED

02/26/06

HB 904

SHORT TITLE In-State Tuition & Financial Aid Eligibility

SB

ANALYST Williams

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

See Text

Recurring

General Fund ----

Higher Education

Funding Formula

See Text

Recurring

General Fund – State

Student Financial Aid

($220.0 to $600.0) Recurring; escalates

over time; see text

Lottery Scholarship

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to Senate Bill 426, which uses legal status as a basis and would deny admission, in-state

tuition and state student financial aid.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Higher Education Department (HED)

SUMMARY

Synopsis of Bill

The bill repeals Section 21-1-4.6(B) NMSA 1976 or Section B of Laws of 2005, Chapter 348.

21

-

1

-

4.6. Nondiscrimination policy for admission to any publi

c post

-

secondary educational

inst

i

tution; nondiscrimination in eligibility for education benefits.

B.

Any tuition rate or state

-

funded financial aid that is granted to residents of New Mexico

shall also be granted on the same terms to all persons, regar

dless of immigration status, who have

attended a secondary educational institution in New Mexico for at least one year and who have

either graduated from a New Mexico high school or received a ge

n

eral educational development

certificate in New Mexico.

House Bill 904 – Page

2

FISCAL IMPLICATIONS

According to the fiscal impact report on Senate Bill 582 from the 2005 legislative session and

Senate Bill 749 from the 2006 legislative session:

“Eligible Groups

. There are several groups which would meet the qualification specified in

Section B including:

1)

Students already attending post-secondary institutions - estimated to be between 50 and

250 at state universities. The number of these students at community colleges is not

clear, but is thought to be considerably higher.

2)

Students receiving high school diplomas in New Mexico and meeting the high school

attendance test, and

3)

Individuals receiving a GED in New Mexico and meeting the high school attendance test.

There is a significant lack of data on number of undocumented individuals living in New

Mexico; INS estimates do not include breakdown of age cohorts of children. In Estimates of the

Unauthorized Immigrant Population Residing in the United States: 1990 to 2000, the

Immigration and Naturalization Service (INS) estimates 39,000 people living in New Mexico as

unauthorized residents in 2000, nearly double the amount of 20,000 in the state in 1990. NCSL

estimates approximately 50,000 to 60,000 undocumented aliens graduate from high schools in

the United States annually; state-by-state estimates are not available. Data on the number of

undocumented aliens in public schools and post-secondary institutions in New Mexico is not

compiled and is not available. HED notes according to the Center for Immigration Studies

analysis of the March 2005 current population survey, the immigrant population in New Mexico

increased from 107,000 in 2000 to 177,000 in 2005, a 65.1 percent increase.

Data on the number of undocumented aliens in Adult Basic Education or GED programs is not

compiled and is not available. The SDE Data Collection and Reporting Unit in its High School

Graduates by Ethnicity indicates 8,116 Hispanic children graduated from New Mexico public

high schools in the 2003-2004 school year. Using the methodology utilized for a fiscal analysis

of similar legislation in Texas, one might estimate 10 percent of the 8,116 Hispanic high school

students, or 812 high school graduates, might be eligible. This represents just 4.5 percent of

total New Mexico high school graduates. According to the SDE Accountability Report, only 69

percent of New Mexico high school graduates apply to post-secondary institutions. This analysis

assumes these students would attend universities and community colleges in the same

proportion, resulting in 560 high school graduates eligible annually. SDE reports 377 Spanish

GEDs were administered in 2004. Clearly, Spanish GEDs would be requested by both citizens

and non-citizens. New Mexico citizens might prefer taking the examination in Spanish, while

some undocumented aliens may prefer taking the examination in English. However, assuming

50 percent of the Spanish GEDs were awarded to undocumented residents and using SDE data

reflecting 59 percent of all GEDs intend to continue to a post-secondary institution, an estimated

111 additional individuals might be eligible each year.

HED reports currently 195 students are reported as being eligible for in-state tuition and state

funded student financial aid without regard to immigration status.

Fiscal Cost

. An informal survey of university registrars indicates if documentation such as a

high school diploma or a GED is issued by the state of New Mexico, then acceptance at in-state

House Bill 904 – Page

3

tuition rates is occurring in practice. In previous years, CHE reported inconsistent practices by

public post-secondary institutions across the state with respect to admissions policies and

assessment of resident tuition. As a result of these practices, the net impact from a surge in

eligible students on the general fund is not significantly large. In this case, the effective

incremental cost of the amended bill stems from extending eligibility to the lottery scholarship

program.

Further, in November 2004, the Commission on Higher Education (CHE) revised its residency

regulation (5.7.18 NMAC). One of the changes approved was to delete the former section

5.7.18.9 D. which defined “Non-U.S. Citizen". The language that was deleted from the

regulation read as follows: ““Non-U.S. citizen" means persons and their children who are not

citizens of the United States shall be classified as residents or non-residents on the same basis as

citizens of the United States if they are lawfully in the United States and have obtained

permanent resident status from the Immigration and Naturalization Service (INS). Non-citizens

on other visas (e.g. diplomatic student, visitors or visiting scholars) shall be classified as

nonresidents. Service in the armed forces of the United States shall entitle the noncitizen to be

classified as nonresident or resident on the same basis as a citizen." The impact of this change

was to provide institutions with broader discretion in determining the residency status of

prospective students according to the overall residency policy.

In the absence of these practices, in theory the legislation could decrease General Fund

appropriations by roughly $5.8 million in FY10 due to the higher education formula funding

which pays for each enrolled student. As each successive class enters the higher education

system, costs would have increased exponentially. Formula-driven FY13 general fund impacts

would have been estimated at roughly $19.3 million.

The reduction in Lottery Tuition Scholarship Fund expenditures is estimated from $220 to $600

thousand in the first full year of implementation, since students enrolling in Fall 2007 would no

longer be eligible to receive the lottery scholarship. The associated savings to the lottery tuition

scholarship fund could grow to approximately $3.7 million in FY11. While data on the numbers

of these students is not available, this projection uses the methodology and data discussed above

and is intended to provide illustrative scenarios.

Finally, General Fund appropriations support other state student financial aid programs. This

legislation would result in fewer claims for state student financial aid and/or the need to

supplement current funding levels over time.

This analysis assumes the HED would not interpret the legislation as a non-resident tuition

waiver. There is no assumption for increases in the number of undocumented residents over

time, i.e. no significant increases in undocumented immigration to the state for any reason. This

analysis assumes individuals moving to New Mexico to receive GEDs would not be eligible

unless they had attended a New Mexico high school for one year. This assumption is critical to

the cost impacts.

SIGNIFICANT ISSUES

According to NCSL, non-documented immigrants or illegal aliens are defined as non-U.S.

citizens who have entered the United States without proper documentation and without

complying with U.S. Immigration and Natural Service (INS) procedures.

House Bill 904 – Page

4

Federal laws entitle undocumented immigrants, regardless of status, access to public schools in

the United States, but prohibit granting financial aid and in-state tuition at post-secondary

educational institutions. In the 1980’s, the Attorney General of the State of New Mexico which

was interpreted that these students might be assessed in-state tuition. The Commission on

Higher Education (CHE) requested an opinion from the Attorney General regarding status of

federal regulation and in-state tuition in 2001. In 2003, the Attorney General sent

correspondence to the Commission on Higher Education on its authority to change regulations

on the issue.

In 2005 legislation, the current statutory provision makes higher education more affordable and

accessible for immigrant students meeting residency requirements as well as offer associated

economic opportunities. Due to their immigration status, these students do not qualify for most

financial aid. The bill could lower drop-out rates. Further, some institutions already admitted

these students at in-state tuition rates, and the 2005 legislation clarified this practice at the state’s

higher education institutions so that all students in the state are treated equally regardless of their

immigration status.

Ten states offer in-state tuition to undocumented students. Texas expanded eligibility to state

student financial aid programs as well. Legislation to restrict access to higher education to these

students has been introduced in Alaska, Missouri, Nevada, North Carolina and Virginia.

Proposition 300 passed in Arizona in 2006 prevents students who are not legal residents of the

United States from paying in-state tuition at public colleges, receiving financial aid paid with

state funds, and participating in adult-education classes offered by the Arizona Department of

Education.

According to the Chronicle of Higher Education in December 2005, out-of-state students

attending California public colleges filed a lawsuit to challenge California’s law to allow

undocumented students to pay in-state tuition. The lawsuit seeks an estimated $600 million

dollars in damages from the state’s three public college systems. The lawsuit represents 60,000

students who have attended University of California, California State University and California

community colleges since 2002. The basis for the suit is the equal protection clause of the 14

th

Amendment of the US Constitution as well as 1996 federal immigration law which states

immigrants who are not legally in the United states cannot be eligible, based on their residence in

a state, for “any postsecondary benefit unless a citizen or national of the United States is eligible

for such a benefit."

California officials indicate the program does not violate federal law because it bases eligibility

on high school attendance and graduation, not residence in the state. Interestingly, University of

California noted 70 percent of the 1,300 UC students under the program are US citizens,

including those students whose families move out of California just after the student graduates

from high school and students whose families live out of state, but who attend boarding schools

in California.

House Bill 904 – Page

5

OTHER SUBSTANTIVE ISSUES

HED notes:

“In a state like New Mexico, students who are undocumented and qualify for admission, in-state

tuition rates, and state-funded financial aid as per Section 21-1-4.6 NMSA 1978, have lived in

the United States and New Mexico for a number of years. The students' parents have worked and

paid taxes to the State of New Mexico for years. In addition, many students have gone through

the New Mexico educational system for all or the majority of their schooling. These individuals

will continue to live in New Mexico and in the United States. By educating these students, you

are preparing them to be contributing members of our society and part of our educated citizenry."

AW/csd