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

SPONSOR Larranaga

ORIGINAL DATE

LAST UPDATED

2/24/07

HB 681

SHORT TITLE Payment of Remedial Courses at Colleges

SB

ANALYST McOlash

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

Department of Finance & Administration – Office of Education Accountability (OEA)

Public Education Department (PED)

Higher Education Department (HED)

SUMMARY

Synopsis of Bill

House Bill 681 amends the Public School Code to require school districts to pay the costs of

post-secondary remedial or developmental courses for graduates who do not meet academic ad-

missions standards at public two-year post-secondary institutions.

FISCAL IMPLICATIONS

NFI

SIGNIFICANT ISSUES

A 2006 study Ready for College. - a joint effort by the Department of Finance/Office of Educa-

tion Accountability, NMHED and PED - found that almost half (49%) of New Mexico public

high school graduates took college developmental courses in numeracy and/or literacy. The data

House Bill 681 – Page

2

included 43,784 unduplicated students enrolled in a New Mexico college or university in Fall

Semester for years 2000, 2001, 2002, 2003, 2004. Of the total, 35,654 were students who gradu-

ated from New Mexico’s public high schools. New Mexico’s public high schools varied in the

percentages of their graduates who took numeracy and/or literacy courses in college; from a low

of 16% to a high of 83%.

The percentage of public high school graduates who took college developmental courses in nu-

meracy and/or literacy varied by the ethnicity of the student:

• American Indian or Alaskan Native – 66%

• Asian or Pacific Islander – 38%

• Black, non-Hispanic – 55%

• Hispanic – 58%

• White, non-Hispanic - 36%

Based on the number of New Mexico graduates (35,654), approximately 17,500 students en-

rolled in remediation courses in Fall Semesters with an annual average of 3,494 per year for five

years. Although the study did not provide data on individual institutions, total remedial courses

at two-year institutions equaled 9,123 (95.1%) of the 9,597 courses offered at all institutions at

any one time.

Cost Estimates

Total cost estimates are difficult with the limitations in data. The calculations presented below

include the various steps to illustrate the rationale. However, they imply a precision that does not

exist.

At the two-year institution remediation course rate (95.1%), an estimated annual average of

3,323 students would be enrolled in remedial courses at these institutions. According to the OEA

analysis

. . . the Higher Education Department (HED) indicates that the average cost of

a remedial course about $45 a credit hour and remedial courses are usually 3

credit hours. These estimates also include a $40 registration fee for each se-

mester.

Presumably, a three credit hour remedial course will cost $175 (3 credit hours X $45

plus $40). It follows that the cost for 3,323 students enrolled in a Fall Semester

$581,525 and, if these same students enroll again in the Spring Semester, the annual

cost would equal approximately $1.2 million.

The Ready for College. report does not include sufficient information to estimate costs at any of

19 two-year institutions or for any of the 89 school districts. However, in the five years (2000

through 2004) the Vaughn district had 13 students that were included in the dataset. Four

(30.8%) of those students reportedly took remedial literacy and/or numeracy Classes in 2000 –

2004. At a rate of less than one student per semester, the annual cost to the Vaughn district

should not exceed $350. For Albuquerque, the 930 remedial course takers in each of five semes-

ters would cost $162,750 or $325,500 per year.

.

House Bill 681 – Page

3

ADMINISTRATIVE IMPLICATIONS

House Bill 681 does not identify an administrative entity to calculate, collect, and transfer fees

from public schools to post-secondary institutions.

OTHER SUBSTANTIVE ISSUES

OEA Analysis

First, institutions of higher education must carefully define which classes are

categorized as remedial or developmental. Some courses are clearly remedial

in nature, for example those that teach basic math or basic reading. Other

courses are labeled developmental but are appropriate for most college stu-

dents, for example those that deal with career exploration. This finding is im-

portant for HB-681, because PED and HED would need a clearer definition of

which courses are truly remedial and thus eligible for reimbursement.

Second, the “Ready For College" study found that different higher education

institutions use different placement tests or different scores on the same place-

ment test to determine if students need to be placed in remedial courses. This

finding is important for HB-681 because PED and HED would need to ensure

that methods for determining which students were placed in remedial courses

were valid and consistent from institution to institution.

BM/mt