New MOHELA sales plan announced
From Missouri Digital News:
MDN Menu

MDN Home

Journalist's Creed


MDN Help

MDN.ORG: Missouri Digital News
MDN Menu

MDN Home

Journalist's Creed


MDN Help

MDN.ORG Mo. Digital News Missouri Digital News MDN.ORG: Mo. Digital News MDN.ORG: Missouri Digital News

New MOHELA sales plan announced

Date: August 28, 2006
By: Kathryn Buschman
State Capitol Bureau

JEFFERSON CITY - The University of Missouri-Columbia would receive $94 million for capital improvement projects under the governor's new plan for higher education funding. The money would be generated from the sale of the Missouri Higher Education Loan Authority.

MU would receive $85 million for a new health sciences research center, $2 million for a business incubator and $3 million for a plant science research center. MU's Delta Research Center and Greenley Learning and Discovery Park would each get $2 million.   

In total the new plan involves spending $350 million worth of assets of the student loan authority. The plan recommends $335 million toward capital improvement projects at state colleges and universities and $15 million to go to the Missouri Technology Corporation to help commercialize new technologies in Missouri.  

The plan now has to be approved by MOHELA's board which meets Sept. 8.   

 The plan, reported by the Associated Press Saturday night, also directs $25 million to a new scholarship program. The governor's original initiative allocated $100 million for the Missouri Opportunity Scholarship Fund.

MOHELA's interim director had questioned as late as April whether the board had authority to sell off its assets without legislative authority.  In an April letter to Gov. Blunt Raymond Bayer, Jr., wrote : "MOHELA has been advised by experienced Missouri law firms that state law does not, as clearly as necessary for a transaction of this magnitude, authorize the transfer and use of the funds contained in the Plan."

At issue is a provision in state law governing assets of the loan authority: "The proceeds, fees, and revenue shall remain under the exclusive control and management of the authority..."

During the last legislative session, some lawmakers argued that section in the law needed to be amended before the authority could give it's assets to another agency in government.

But Speaker of the House, Rod Jetton, R-Marble Hill, said that legal concern would be addressed by using the Missouri Development Finance Board as a conduit for the money from the board to the schools.

Instead of going directly to the universities, the money generated from the sale of the loans would go through the Missouri Development Finance Board and then distributed to schools.  

"There was some concerns on without legislative approval if MOHELA could [be sold]," said Jetton. "I think that's when the attorneys looked at this and came up with the conclusion that if it would go from one non-for profit entity, which MOHELA is, to another, which the Missouri Development Finance Board is, then it would be legal to give the money straight to the universities."

However, Roger Wilson, chairman of the Missouri Democratic Party, said having the money funneled this way is a wrinkle in the plan. "Are they still going to spend it on higher education projects or is this going on other projects? Nobody's answered that and that is something that kind of jumped off the page at me."  

Jetton also said the new plan is more beneficial to students because MOHELA will not be liquidated under the plan. "The first plan the governor had was to totally get rid of MOHELA and sell it totally off and eliminate it," Jetton said. "They are now going to sell off some of the assets, MOHELA will still be going, still be offering low-interest loans.  

House Minority Floor Leader, Jeff Harris-D-Columbia, said he was surprised with the lack of attention given to the plan.

 "It is a little strange, " he said. "Governors have press conferences for state apple day, governors have press conferences pretty frequently-they're politicians like everyone else. It is strange that this governor chose to basically sort of  leak this thing out there on a weekend as opposed to gathering everyone in his office and looking them in the eye and tell them this is our plan and this is why we think it is a good one."

Sen. Chuck Graham, D-Columbia also voiced concerns that the governor did not have the authority to sell the state college loan program and that selling the student's loans would create higher interest rates for future students and unnecessarily burden them with higher costs.  

$85 million MU health sciences research center
$2 million MU business incubator
$3 million MU plant science research center
$2 million MU Delta Research Center, plant science greenhouse
$2 million MU Greenley Learning and Discovery Park