Nixon urges 'no' for MOHELA proposal

The initiative could bring approximately $94 million to MU.

By Jonathon Braden, Reporter

Published Sept. 8, 2006

Missouri's attorney general "strongly urged" the Missouri Higher Education Loan Authority Board to reject a newly updated version of the Lewis & Clark Discovery Initiative.

The latest plan to sell $350 of MOHELA's assets and reinvest the proceeds for various higher education projects was announced last week by Gov. Matt Blunt and could be voted on today.

In a nine-page letter sent to the board on Wednesday, Attorney General Jay Nixon outlined several problems he has with the proposal.

"More than half of the projects listed in the proposal were never on the coordinating board's list of capital projects in need of financing," Nixon stated in the letter. "The administration's proposal merely makes a down payment on many of the more significant projects listed."

Nixon said the balance of the funding for some projects would likely have to come from donors or students in the form of higher tuition.

Another concern Nixon has involves MOHELA's primary function as a loan agency.

"The sole purpose for which MOHELA was created is to 'assure that all eligible post-secondary education students have access to student loans that are guaranteed or insured, or both,'" Nixon said.

Selling the assets to fund capital projects constitutes a wholesale abandonment of MOHELA's purposes, Nixon said.

Blunt's spokesman Spence Jackson disregarded Nixon's letter as political propaganda.

"It's a political stunt by the attorney general and proves beyond the shadow of a doubt that he is an enemy of higher education and creating jobs for working families," Jackson said.

Jackson said Nixon is claiming everyone who reviewed the initiative thus far, including 22 college presidents, is wrong.

"It's an egocentric point-of-view," Jackson said.

The plan needs two separate boards' approval before the start of its payments. The MOHELA Board will hold a hearing today and might vote on the proposed plan. The Missouri Development Finance Board will convene on Sept. 19 to discuss the plan. Pending approval, payments from the plan will begin this month.

The initiative will bring approximately $94 million to MU for four projects, including $85 million for the university's Health Sciences Research Center, $3 million for the Plant Sciences Research Center, $2 million for the Life Science Business Incubator and $5 million for agricultural research centers.

Rep. Judy Baker, D-Columbia, said she is unhappy with the plan's recent developments.

"I advocate that in the future, as we plan for higher education projects, that the public, legislators and state leaders are included in the decision-making," Baker said.

Blunt; Rep. Rod Jetton, R-Marble Hill; and Sen. Michael Gibbons, R-Kirkwood, reached an agreement that would bypass legislation. The revised plan goes through the Missouri Development Finance Board, meaning the agreement does not need legislative approval. The initial plan, introduced this spring, needed legislative approval but stalled in the General Assembly.

Despite her concerns, Baker said she supports the current proposal.

"I have been assured by the governor's office that this new deal is not going to hurt students or be illegal," Baker said.

On Tuesday, the UM system Board of Curators held a phone conference to discuss the Lewis & Clark Discovery Initiative.

"The board members were very supportive of the governor's plan to provide a much-needed infusion of money for buildings on our campuses," UM spokesman Joe Moore said.

Moore said UM system President Elson Floyd intends to sign an agreement whereby the system will make a concerted effort to use MOHELA for student loans where possible.

In the 2005-06 school year, MU processed about $6 million of loans through MOHELA, $8 million through other organizations and $116 million through the federal direct lending program, MU spokesman Christian Basi said.

MU started using the federal direct lending program in 1995.