CSF OWES $2.2 MILLION, MAY GET INCORPORATED.

Byline: JOHN SENA

While a partnership with Laureate Education Inc. is no longer a possibility, the College of Santa Fe still owes the company $2.2 million that it borrowed to run the school.

A partnership would have meant Laureate assumed the college's debt and helped with recruiting and marketing. College officials said Tuesday that Laureate agreed to lend the school operating funds for the duration of partnership talks.

But the deal fell through, and the state is looking into the possibility of incorporating the college into a state institution, namely The University of New Mexico or New Mexico Highlands University.

Now the college owes Laureate and will rely on donors to get through the rest of the school year, said Marcia Sullivan, vice president of administration and communication.

"Supporters of the college have gathered together the funds to sustain us through the end of next semester," Sullivan said Tuesday.

Sullivan said president Stuart Kirk told faculty, staff and students about the donations during three forums Tuesday.

The announcement was a bit of good news during a time when the college's future is in question.

After years of financial problems and now, after partnership talks with two other institutions have failed, a state takeover could be the last resort.

If the college becomes part of the state's higher education system, it could cost the state as much as $13 million, based on preliminary information from state officials.

The state's Higher Education Department has estimated tuition from the college could generate about $10 million and cover much of the college's $15.5 million operating budget.

That number, though, is based on calculations that use The University of New Mexico's tuition rates.

If the college is incorporated into New Mexico Highlands University, where tuition is about 44 percent less than UNM, revenue from student tuition would generate only about $2.5 million, based on the college's current enrollment. That would leave the state on the hook for $13 million.

Enrollment at the college could generate as much as $12.6 million through the state's funding formula, according to the HED, but would probably be less after tuition credits.

Reed Dasenbrock, secretary of higher education, stressed that any information based on the data is preliminary and is intended primarily to give state institutions an idea of what a takeover of the college might mean.

"We see our role as essentially getting a conversation going in which the public institutions are aware of the college's situation," Dasenbrock said.

Dasenbrock also said that if a takeover is approved by the Legislature, his department is advocating a phase-in of state funding that would allow some flexibility during a two-year transition. The school would be funded strictly by the funding formula beginning in 2012 under the suggestion.

A state takeover could prove a tough proposition when the state is facing a budget deficit that could be as much as $500 million, a reality that both Dasenbrock and Gov. Bill Richardson have acknowledged.

According to Tony Pals, a spokesman for the National Association of Independent Colleges and Universities in Washington, D.C., state takeover of a private institution is extremely rare, and NAICU has no record of such an event in the last 90 years.

Meanwhile, Kirk has already met with representatives from both UNM and Highlands, Sullivan said, and is scheduled to meet with more UNM folks today.

Contact John Sena at 986-3079 or [e-mail].