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F I S C A L I M P A C T R E P O R T
SPONSOR Carraro
ORIGINAL DATE
LAST UPDATED
1/29/08
HB
SHORT TITLE Graduate Student Loan Act
SB 297
ANALYST Wilson
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY08
FY09
$2,000.0
Recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY08
FY09
FY10
$2,000.0
Recurring Graduate Student
Loan Fund
(Parenthesis ( ) Indicate Revenue Decreases)
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY08
FY09
FY10 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
$0.1
$0.1
$0.1 Recurring General
Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Higher Education Department (HED)
SUMMARY
Synopsis of Bill
Senate Bill 297 appropriates $ 2,000,000 from the general fund to
the graduate student loan fund
for expenditure in fiscal year 2009 and subsequent fiscal years to provide loans to eligible and
qualified graduate students.
pg_0002
Senate Bill 297– Page
2
This bill establishes a graduate student loan program to provide low interest loans at 3% a year
on the principal amount. The loan may be up to $1,000 per semester for no more than six
semesters provided the loan does not exceed the cost of tuition and fees for the semester in which
the loan occurs.
The graduate student loan will be offered to eligible and qualified graduate students to help
defray the education-related costs of attending graduate school. This loan will be administered
by the HED.
FISCAL IMPLICATIONS
The appropriation of $ 2,000,000 contained in this bill is a recurring expense to the general fund.
Any unexpended or unencumbered balance remaining at the end of fiscal year 2009 shall not
revert to the general fund.
This request was not submitted to the New Mexico Higher Education Department for review and
is not included in their legislative recommendation for FY09.
This bill creates a new fund and provides for continuing appropriations. The LFC has concerns
with including continuing appropriation language in the statutory provisions for newly created
funds, as earmarking reduces the ability of the legislature to establish spending priorities.
HED states additional staffing may be required to support this program.
SIGNIFICANT ISSUES
HED provided the following:
In the 2006-2007 academic year, 3,113 graduate students were enrolled in New Mexico’s
four-year universities with the largest numbers in the fields of education, math, science
and engineering; business and health related professions.
pg_0003
Senate Bill 297– Page
3
The median age for graduate students statewide was 41 years old. National debt averages
for graduate students, according to the U.S. Department of Education are below:
Graduate Education
Debt
All Education Debt
(Grad & Undergrad)
Graduate &
Professional
Degree
Programs
Percent
Borrowing
Cumulative
Debt
Percent
Borrowing
Cumulative
Debt
Total
60.1% $37,067 70.1% $42,406
Master's
Degree
58.4% $26,895 69.3% $32,858
Doctoral
Degree
51.0% $49,007 58.3% $53,405
Professional
Degree
86.5% $82,688 88.4% $93,134
MBA
53.0% $35,525 63.6% $41,687
MSW
76.5% $27,136 81.0% $37,029
PhD
40.0% $36,917 46.8% $41,540
EdD
53.4% $49,050 65.7% $47,725
Law (LLB or
JD)
87.7% $70,933 89.7% $80,754
Medicine 95.0% $113,661 95.0% $125,81
A low interest rate program at $1,000 loan per semester may alleviate some financial burdens for
a student facing financial barriers in obtaining their graduate degrees.
ADMINISTRATIVE IMPLICATIONS
HED shall collect all interest and principal payments made by the student under the terms of the
contract and shall deposit the payments in the graduate student loan fund.
HED will be the administrator for these funds involving receipt, disbursement, and tracking to
the educational institutions. They may need additional staffing to support this program.
OTHER SUBSTANTIVE ISSUES
HED noted graduate students attending one of New Mexico’s four year institutions experience
less than national average tuition rates as indicated below.
Tuition rates for graduate students:
Residents:
NM Tech: $4,232
New Mexico State University: $4,781
University of New Mexico: $5,023
Eastern New Mexico University: $3,516
New Mexico Highlands University: $2,642
Western New Mexico University: $3,391
pg_0004
Senate Bill 297– Page
4
Non-Residents:
NM Tech: $12,432
New Mexico State University: $14,558
University of New Mexico: $15,361
Eastern New Mexico University: $9,060
New Mexico Highlands University: $3,978
Western New Mexico University: $12,079
HED currently offers 20 financial aid programs including the Graduate Scholarship. It was
created to increase graduate enrollment at public postsecondary institutions and targeted at New
Mexico’s under-represented groups. To be eligible, a student must be a New Mexico resident,
must be a graduate student enrolled at a New Mexico 4-year public postsecondary institution.
Preference will be given to students en-rolled in business, engineering, computer science,
mathematics, or agriculture and to American Indian graduate students. Awards are up to $7,200
per year and must serve 10 hours per week in an unpaid internship or assistantship.
DW/bb