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
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F I S C A L I M P A C T R E P O R T
SPONSOR Adair
ORIGINAL DATE
LAST UPDATED
02/28/07
HB
SHORT TITLE In-State Tuition & Financial Aid Eligibility
SB 426
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 House Bill 904, which does not
use legal immigration status as a basis and does not
deny admission on that basis, but restricts in-state tuition and state student financial aid.
SOURCES OF INFORMATION
LFC Files
Responses Received From
Higher Education Department (HED)
SUMMARY
Synopsis of Bill
Senate Bill 426 specifies that a student who is not a citizen or who not a legal immigrant would
be defined as a nonresident for tuition purposes.
The bill amends Section A and repeals Section B of Section 21-1-4.6 NMSA 1976. In Section A,
current statute amends to specify that public, higher education access cannot be denied due to
legal immigration status; however, any other status could result in denial of admission.
Further, the following section of statute is repealed, effectively eliminating in-state tuition and
state student financial aid for those students who do not have legal immigration status:
pg_0002
Senate Bill 426 – Page
2
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, regardless 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.
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.
pg_0003
Senate Bill 426 – Page
3
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
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.
pg_0004
Senate Bill 426 – Page
4
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.
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.
pg_0005
Senate Bill 426 – 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/nt