Emergency Fund Proves Worth

Officials at Central New Mexico Community College are finding that giving students a few bucks in their time of need can go a long way toward keeping them enrolled and on track toward a degree.

The Rust Opportunity Assistance Fund, established in 2005, is an “emergency fund” offered to any Central New Mexico student facing an “unforeseen financial situation” that could force him or her to drop out of college. The unforeseen circumstances, which must be beyond students' control, can mean anything from a month’s worth of rent or a utility bill when a traditional source of income has disappeared or an emergency medical bill has taken priority.

Although students must provide documentation outlining exactly how much money they need, how it will be used and who should be paid, there are few stated limits as to how much money can be requested and for what it can be used. However, the college will award funds to a student no more than one time per academic year.

Central New Mexico officials say the initial four-year pilot of the fund – a $500,000 investment primarily bankrolled by private donors – has been an unlikely success for such a “nontraditional” and “non-academic” financial assistance option. Initially, some donors to the college and instructors at the institution thought the fund was not an appropriate way to distribute scholarship money because it did not provide assistance to make use of academic services but social ones.

“Sometimes at colleges you may hear from folks who say, ‘This is not our job,’ ” said Ann Lyn Hall, director of student transitional programs at Central New Mexico. “They’ll argue that our job is education and that someone else should be responsible for social services. Still, our good quality data make a pretty strong argument that a one-time, small chunk of money can help a student stick around to finish their education. I’m really pleased with the results. I thought with these students, many of whom are one step away from dropping out of school, that the retention numbers would be lower.”

This past academic year, the 244 fund recipients had a term-to-term retention rate of 85.25 percent – meaning that they were retained from the semester in which they received money to the next. This is head and shoulders above the retention rate of 67.7 percent for first-time students at Central New Mexico. Though college officials acknowledge that this is not quite an “apples to apples” comparison – given that students who received funds might be in their second year or later in comparison to just the overall retention of first-time, first-year students – they do note that the demographics of fund recipients are comparable to those of the entire study population. For example, Hispanic students made up 40 percent of last year’s fund recipients, and are 40 percent of the college's total enrollment as well. And 60 percent of the fund recipients were female -- just three percentage points higher than overall female enrollment.

Data on Rust Opportunity Fund Awards, 2005-2008

Lisa McCulloch, executive director of the Central New Mexico Community College Foundation, which manages the fund, said its flexibility is both an asset and a frustration to students and officials at the institution. Instructors and academic advisers, both of whom must write letters of recommendation for a student to be considered for the fund, have asked McCulloch to state a maximum or minimum dollar amount to be given to students, arguing that some do not know how much it is appropriate to request.

“We want to keep it flexible for the very reason so that it is there to help students in nontraditional situations,” said McCulloch, noting that students who are approved for funds are guaranteed to receive them within 48 hours of submitting their application. “The average gifts have been between $300 and $1,000 in recent years, but that doesn’t mean that in the whole time period there haven't been cases where we've approved someone for more than, say, $1,500, for example. The only thing I’ll make clear is that we won’t consider requests to pay off debt or things like cell phone and cable bills. We’re about funding basic life necessities and those are things they could do without.”

Last year, nearly half of all recipients asked for help paying for their housing. The next most popular requests were for help paying utility bills and purchasing textbooks and school supplies.

Reasons for Rust Opportunity Fund Awards, 2008-2009

Valerie Otero, a 27-year-old single mother of three, nearly lost her house to foreclosure last December: Her ex-husband lost his job in construction and, while unemployed, was unable to pay child support, Otero’s primary source of income. The fund paid her $743 mortgage payment that month; meanwhile, her ex-husband found new employment. To give her a more sustainable source of income – and possibly prevent her from having to make future requests, should her child support lapse again – college officials placed her in a work-study program, in which she will remain until she finishes her nursing program.

“My next step, if I didn’t receive this money, was to drop out of college and get a full-time job,” Valerie said. “I probably wouldn’t have come back to college either, because I would have not felt comfortable that I couldn’t go to school and also make my mortgage payments before. This program is an absolute godsend. I mean, if you need help, all you can do is ask.”

Nancy Romero Martinez, a 52-year-old disabled woman retraining for a second career, expressed similar gratitude for the fund. Though her Social Security disability benefits are usually enough to cover most of her life expenses, they were not enough when she needed an emergency root canal last year – especially given that she does not have dental insurance. The fund paid Martinez’s $250 rent that month, allowing her to cover some of the cost of her dental surgery.

“I support my mother as well, so I wouldn’t have been able to stay in school if I had to pay for this,” said Martinez, who after working for nearly 20 years as a social worker is now hoping to become a project management developer. “I was just really worried, at first. I was even planning on selling some of my jewelry or other things before I heard about this program. I didn’t want that interruption in my education because I’m struggling to get through my expenses enough as it is.”

Though Central New Mexico officials say the program has slowly won over the naysayers with its retention successes, they note that the assurance that the grant money is going where it is supposed to go has also lent further credibility to the program. Unlike other “emergency funds” in which the money is given to the students to use for their stated purpose, this fund pays money directly to the vendor in question. For instance, if money for a rent payment is requested, the college will cut a check to that student’s landlord.

“We’re not just bleeding heart liberals giving money to everyone who says they need it,” Hall said. “This also meets the needs of and is quite conscientious to the funders. When I was head of a grant-funded program to improve our retention, I found out that none of the students I talked to needed the kind of academic resource help I was offering then. Most were just facing a pressing financial barrier that was keeping them from focusing on school. Now that some faculty members have seen how this program works, it’s changed a lot of opinions about this type of funding.”

The Rust Opportunity Assistance Fund has been refunded by its namesake donors for another four-year period. They have also expressed an interest in endowing it so that it can become a permanent option for students at Central New Mexico.