AN ACT

RELATING TO EDUCATION; ENACTING THE COLLEGE AFFORDABILITY ACT; PROVIDING FOR SCHOLARSHIPS; CREATING FUNDS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. SHORT TITLE.--This act may be cited as the "College Affordability Act".

     Section 2. PURPOSE.--The purpose of the College Affordability Act is to encourage New Mexico students with financial need to attend and complete educational programs at public post-secondary educational institutions in New Mexico.

     Section 3. DEFINITIONS.--As used in the College Affordability Act:

          A. "commission" means the commission on higher education;

          B. "returning adult" means a student enrolling in a public post-secondary educational institution at any time later than the first semester following high school graduation or the award of a general educational development certificate; and

          C. "student" means a resident of New Mexico who is enrolled or will be enrolled, at the time the scholarship is awarded, in a public post-secondary educational institution in New Mexico.

     Section 4. CONDITIONS FOR ELIGIBILITY.--A college affordability scholarship may be awarded to any person who:

          A. is a resident of New Mexico for the purpose of tuition payment;

          B. has not earned a baccalaureate degree and is enrolled or will be enrolled at least half-time in a degree program in a public post-secondary educational institution in New Mexico at the time the scholarship is awarded;

          C. has demonstrated financial need consistent with the criteria promulgated by the commission; and

          D. has complied with other rules promulgated by the commission to carry out the provisions of the College Affordability Act.

     Section 5. SCHOLARSHIP AUTHORIZED--ADMINISTRATION--PREFERENCE IN SCHOLARSHIP AWARDS.--

          A. The commission shall administer the College Affordability Act and shall promulgate rules to carry out the provisions of that act.

          B. Scholarships shall be awarded to qualified applicants. Qualifications shall be determined by rule of the commission.

          C. The commission shall allocate money to public post-secondary educational institutions based on a student need formula calculated according to income reported on the free application for federal student aid and on the percentage of the institution's students classified as returning adults who are otherwise ineligible for state financial aid.

          D. Public post-secondary educational institutions shall make awards to qualifying students based on financial need in an amount not to exceed one thousand dollars ($1,000) per semester as determined by rule of the commission.

          E. Money for an awarded scholarship shall be placed in an account at the public post-secondary educational institution in the name of the student, and the money may be drawn upon to pay educational expenses charged by the institution, including tuition, fees, books and course supplies.

     Section 6. DURATION OF SCHOLARSHIP.--Each scholarship is for a period of one semester. A scholarship may be renewed, provided the recipient continues to meet the conditions of eligibility, until the award recipient has received eight consecutive semester scholarship awards or until the student graduates from an eligible four-year public post-secondary educational institution, whichever occurs first.

     Section 7. TERMINATION OF SCHOLARSHIP.--A scholarship is terminated upon occurrence of one or more of the following:

          A. withdrawal of the award recipient from the public post-secondary educational institution or failure to remain as at least a half-time student;

          B. failure of the award recipient to achieve satisfactory academic progress; or

          C. substantial noncompliance by the award recipient with the College Affordability Act or the rules promulgated pursuant to that act.

     Section 8. FUNDS CREATED.--

          A. The "college affordability endowment fund" is created in the state treasury, consisting of appropriations; unspecified gifts, grants and donations; and income from investment of the fund. Income from investment of the fund shall be distributed to the college affordability scholarship fund as provided in Subsection C of this section and no other distributions, transfers or reversions shall be made from the fund at the end of any fiscal year.

          B. The "college affordability scholarship fund" is created in the state treasury, consisting of income from investment of the fund as provided in Subsection C of this section and any specified appropriations, gifts, grants and donations. Money in the scholarship fund is appropriated to the commission for scholarship awards as provided in the College Affordability Act. Expenditures from the scholarship fund shall be by warrant of the secretary of finance and administration pursuant to vouchers signed by the executive director of the commission on higher education or the executive director's authorized representative.

          C. Until the corpus of the endowment fund is two hundred fifty million dollars ($250,000,000), fifty percent of the income from investment of the fund shall be applied to the corpus of the fund and fifty percent shall be distributed annually to the scholarship fund, from which the commission will make scholarship awards as provided in the College Affordability Act.