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New Mexico Higher Education Sustainability Study

Summary

In 2024, the New Mexico Department of Higher Education partnered with NCHEMS to conduct the Higher Education Sustainability Study. NCHEMS applied an adequacy model to examine the key foundational costs of providing higher education in the state and estimated potential gaps in funding in individual institutions and across sectors. The study also reviewed the policies and procedures connected to how the state provides appropriations outside the funding formula and evaluated the performance-driven formula. As a second component of the study, NCHEMS closely reviewed the state’s process for awarding funding for Research and Public Service Projects, or RPSPs. NCHEMS provided policy analysis and focus group findings to inform the state on how to adjust its processes for awarding program-level funding to the public institutions in the state.

Topics Challenges Approach

Topics

The Higher Education Sustainability Study covered the following topics:

  • Funding Adequacy.
    • NCHEMS applied the adequacy model to estimate potential inequities in state funding allocations by institution and sectors.
  • Higher Education Funding Policy.
    • NCHEMS analyzed all types of higher education funding policies and recommended options for improvement.
  • Performance Funding.
    • NCHEMS reviewed the current performance funding metrics and offered recommendations for changes based on national trends and stakeholder feedback.

A second report focuses on Research and Public Service Projects and covers the following topics:

  • Analysis of existing policies and practices.
  • Findings from three focus groups designed to gather feedback about the current RPSP process environment.
  • Recommendations for the state to consider as it reforms RPSP policies and procedures.

Challenges

In FY22, only three other states devoted a higher share of their state’s budget to higher education than New Mexico. At the same time, higher education in New Mexico has experienced a significant transformation in recent years. Notably, the state recently launched a historic new Opportunity Scholarship program, bringing tuition costs to $0 for eligible New Mexicans. Like other states, New Mexico has also coped with enrollment decline. To ensure that the colleges and universities in New Mexico receive adequate funding to serve all students , NCHEMS assessed the funding formula and offered recommendations for improvement. This initiative identified existing funding disparities and explored strategies to optimize the base, RPSP, and performance components, with the goal of enhancing institutional sustainability, transparency, and student success.

Approach

NCHEMS used a mixed-methods approach to conducting the Higher Education Sustainability Study. The qualitative component focused on stakeholder engagement with NM HED, and a technical committee, which included representatives from various formula-funded institutions and associations. NCHEMS conducted stakeholder engagement through presentations to the technical committee and virtual focus groups with the campus leaders to learn more about the RPSP process. The data sources used in the quantitative analysis include IPEDS, NM HED and some individual campuses.