Illinois plan similar to MOHELA
Funds would go to monetary award programs and higher education.
Published Oct. 31, 2006
Illinois has begun planning to sell a portion of its student loan portfolio to allocate funding to different areas to benefit higher education. A ruling earlier this month by Attorney General Lisa Madigan provided guidance as to how much of the portfolio could be sold, director of state relations Claude Walker said.
Walker said Madigan said the Illinois Student Assistance Commission should not sell its entire portfolio. Walker also said they were not planning to sell the entire portfolio.
ISAC is looking to restructure the student loan portfolio, which has a price tag of about $3.5 billion, Walker said.
Missouri has been facing a similar situation, but with several differences.
Gov. Matt Blunt announced the sale of portions of the Missouri Higher Education Loan Association earlier this year, with the money also set to go toward higher education. Under the plan, MOHELA would sell $1 billion in assets.
Pending legislative approval, this will fund $350 million for construction and other projects at Missouri colleges.
Of that, $335 million will be provided for capital improvement projects at colleges and universities, and $15 million would go to the Missouri Technology Corporation to assist with commercialization of new technologies. MU would get $94 million from the sale of MOHELA.
Under ISAC's sale, Walker said $34.4 million would go to Monetary Award Program Plus, a program that would give a one-time $500 grant to sophomores, juniors and seniors who come from middle-income families.
They would receive $250 during the fall semester and then the other $250 during the winter semester. This is a similar program to the original Monetary Award Program, which provided grants to low-income families.
Another $34 million will go to MAP, the elder of the two programs.
MAP Plus is new, but MAP has been around for 30 years, Walker said.
This makes it the "highest amount for MAP in anyone's memory, certainly in the past decade," Walker said.
The remaining funds from the sale, not allocated to MAP or MAP Plus, will be required to go to higher education.
ISAC has two financial advisors to coordinate this sale of part of the portfolio, Walker said.
The primary strategic financial adviser will oversee the restructuring of funds, he said. The other adviser is Garder, Underwood and Bacon.
The MOHELA plan has changed forms several times this year, but the sale could go through sometime next year, with the next action being legislative approval.
"The Lewis and Clark Discovery Initiative is a way to protect student loans and also to further help universities, including Mizzou," Blunt spokesman Brian Hauswirth said.
Hauswirth said nationally respected economists have said it's a good idea, and the governor's office is convinced that it will be beneficial for students.