Gov. Michelle Lujan Grisham’s administration said Tuesday it is reworking a key aspect of its free college tuition proposal, doing away with a component legislators and college presidents had said might be disadvantageous to lower-income students.

Lujan Grisham’s office said it has been working with the Senate on a so-called “middle-dollar” version of the Opportunity Scholarship, rather than the “last-dollar” plan it announced last fall when it unveiled the proposal, which aims to provide free tuition to all New Mexicans.

The comments came one day after an important House committee left the initiative out of the main budget bill before sending it on to the full chamber. That panel had expressed concerns the scholarship didn’t do enough to help low-income students.

“We are always open to entertaining suggestions and ideas in order to make the governor’s vision of universal higher education a reality — and to that end we are moving forward with a middle-dollar approach,” spokeswoman Nora Meyers Sackett said.

Under the new scenario, the scholarship would still cover tuition and fee gaps remaining after students use the Legislative Lottery Scholarship and other state programs. But it would be applied before they tap into federal programs such as Pell Grants, thereby freeing up more federal aid to pay for the cost of attendance and living expenses.

The original proposal would have covered tuition and fees left over after all other programs had been applied.

“I think there’s been an acknowledgment from the executive that the Legislature has concerns about making sure it is in all cases a benefit to lower-income students, not a detriment,” House Speaker Brian Egolf said Tuesday. “I think that message has been received and the higher education secretary is working on a reform of the bill.”

The scholarship proposal is one of Lujan Grisham’s top initiatives for this legislative session and was announced amid much fanfare last September. Yet the legislation, House Bill 14, has yet to be taken up in committee, even as the session hits its halfway point.

Sen. John Arthur Smith, chairman of the Senate Finance Committee, said the House Appropriations and Finance Committee “sent a message that it’s dead on the House side.”

“It sounds to me like the HAFC threw [the governor] under the bus,” Smith said.

Yet Smith, whose committee will take up the budget bill once it passes the full House, added his Senate committee would “try to do the best we can to correct it.”

While Smith said there might not be a lot of extra funding to rescue the proposal, Egolf said the budget legislation earmarks funds for certain bills that may not move forward. If they don’t, there could be extra money for the scholarship, he said.

“It’s absolutely possible to put it back in,” he said.

It was unclear why legislators and the Governor’s Office were unable to iron out their disagreements on the proposal before the House committee approved the budget legislation, or House Bill 2.

Senate President Pro Tem Mary Kay Papen said “the communication could have been better” between the two branches, but also said she hoped “we can get our differences worked out.”

Some of the disagreement may have stemmed from a fundamental difference in perspective on which measures would do most to raise higher education enrollment and graduation rates in New Mexico.

The Legislative Finance Committee, for instance, released a report just before the session citing research showing tuition and fee costs were not the obstacle to students who pursue a college degree.

“Rather, the researchers highlight the cost of attendance — cost remaining after scholarships and grants — is the financial obstacle for low- and middle-income students in particular,” the January report said.

Some college presidents had also said that under the proposal, lower-income students might have trouble getting help to cover expenses such as books, transportation, housing and food — costs that can often be a greater financial obstacle to prospective students than tuition, which is comparatively low in New Mexico.

The Governor’s Office has maintained throughout that “universal higher education” is the best way to go, and it reiterated that point of view on Tuesday.

“We have always believed covering tuition and fees for students does not disadvantage anyone — and that the Opportunity Scholarship will make most every student whole,” Sackett said.

In recent interviews, university presidents haven’t publicly opposed the Opportunity Scholarship and have maintained for months that they would welcome free tuition for students. Yet they said Tuesday the potential change would make the measure better.

Western New Mexico University president Joseph Shepard said the revision in the proposal would be “absolutely wonderful” and “the right direction.”

“If you switch it to middle dollar, it really benefits your low income students because now they can use their Pell for costs in addition to tuition,” he said.

Becky Rowley, president of Santa Fe Community College, also said the potential change would be particularly helpful for her institution’s students because they often need more help covering other costs.

“Tuition is not the primary expense for our students,” Rowley said Tuesday. “Oftentimes, it’s more expensive for students to pay for books that tuition.”

Marc Saavedra, executive director of the Council of University Presidents, said he hadn’t seen any changes but that moving the proposal to “middle dollar” would “give the students flexibility.”

“If that’s the case, that’s friendly,” he said.