Northern New Mexico College President Rick Bailey presented a new software program Jan. 31 to the College’s Board of Regents that he said would change the way student financial aid works.
The program, called Up$tart, would aggregate the applications for three different benefits: Free Application for Federal Student Aid (FAFSA), Earned Income Tax Credit (EITC) and Supplemental Nutrition Assistance Program (SNAP).
Currently, around 70 percent of Northern students are eligible for federal Pell Grants through FAFSA, which Bailey said often means they are also eligible for EITC and SNAP. However, students do not always take advantage of the programs.
“Pell Grant recipients often qualify for those two benefits, but rarely take advantage of it,” he said.
These extra programs would give students an average of $8,000 more in benefits every year, according to Up$tart’s website.
Bailey said the additional money would make it easier for student’s to finish school, increasing the College’s poor graduation and retention rates.
He proposed the Board approve the $100,000 purchase. The money would be paid to Up$start LLC, the company that oversees the program.
However, some Board members raised concerns about one of Up$tart’s founders: Rick Bailey.
Regent Damian Martinez said he wanted to make sure no policies were being violated if they went ahead with the purchase, especially with the apparent conflict of interest of the College president being a founder.
Bailey said he already had a solution to address any potential conflict.
“Because I know it would be a conflict of interest for me to benefit from this personally, every penny of the profits that would normally go to me would go the College and the (Northern) Foundation,” he said.
According to the Santa Fe-based company’s website, Bailey is one of four founders of the company. He said he and Vice President for Finance and Administration Rick Bejarano had discussed the proposal with the College’s attorneys, who gave him verbal confirmation that it was legally sound, but none of it was in writing.
“I’m uncomfortable agreeing to spend $100,000 if we don’t have a legal review that says that this won’t violate the Constitution of the State of New Mexico,” Martinez said.
Martinez, a Las Cruces-based lawyer, said he was not sure if colleges and nonprofits can receive third-party donations.
Bailey also said the company plans to sell the software to colleges and universities around the country. The revenues from those sales, which he said could add up to millions, would still go to Northern and its foundation.
Bailey currently serves as a board member on the Foundation and also as its de factoexecutive director.
When asked if this was a conflict of interest, since he would oversee all money going into the Foundation from Up$tart, Bailey said that was not for him to decide.
“I’ll leave that to the public to decide,” he said. “I’ll accept responsibility for my efforts to try and bring more funding into the College and the Foundation.”
The Board decided to table the Up$tart purchase and will now wait for Bailey to provide a legal review that ensures the purchase would be ethical. Bailey said he understood Martinez’s concerns.
“It’s his job to protect me from myself,” he said.
During the Feb. 28 Board meeting, Martinez said he did not want his earlier statements to imply he does not support Bailey or Up$tart.
A written legal review still has not been presented before the Board.