MOHELA passed through board
Published Sept. 29, 2006
After months of debate, the Missouri Higher Education Loan Authority Board voted Wednesday to sell $1 billion worth of assets and student loans in order to fund $350 million of construction and other projects for Missouri colleges.
The board approved the initiative with a 4-2 vote, but it still must be passed by the Missouri General Assembly in January. Legislative approval was added to the plan Monday in order to protect MOHELA from legal action from Missouri Attorney General Jay Nixon.
"I am pleased the governor has realized that the legislature needs to be involved with it," said Sen. Joan Bray, D-St. Louis.
Construction and renovation will constitute $335 million of the $350 million produced by the sale.MU will receive $94 million, the most of the four system campuses.
UM system spokesman Scott Charton said he is pleased the projects will be funded.
"We are so grateful that the spotlight for public discussion has been focused on the critical capital needs of public education," Charton said.
Before the legislature votes on the initiative, a few topics will be discussed.
First, there is a problem with the use of MOHELA money for students. Student loans are being sold, and the issue at hand is privately raised money being made public.
"Loans are absolutely crucial for students to attend college," Bray said.
Governor spokesman Spence Jackson said MOHELA has assured everyone the plan will not affect the loan interest rates offered by the loan agency.
Rep. Ed Robb, R-Columbia, said he is much in favor of the sale.
He said the board agreed to an arrangement that guarantees MOHELA $1.3 million in tax-exempt bond allocation by the state over the next 10 years. Also, he said, $25 million would be given for student scholarships, which equates to roughly 10,000 scholarships.
Another topic surrounding the sale is the wording prohibiting human embryonic stem cell research in any buildings paid for by the MOHELA sale.
Charton said UM preferred no restrictions placed on research buildings. Legislative action allows the opportunity to eliminate this section of the sale.
Although the General Assembly reconvenes in January, it may take until Aug. 28, 2007, for MU to see any of the money generated from the sale. The legislation will not be effective until that date unless it is passed with an emergency clause, Robb said. That would require a two-thirds vote in both houses, which he said is "hard to get."
Jackson said the fact that the MOHELA board has approved it and because there is significant bipartisan support, the sale merits a quick passage.
But the issues surrounding the sale might not provide legislative results and money for campuses until later next year.
"I have not been persuaded," Bray said. "I'll have a lot of questions and need a lot of discussion."