Loan forgiveness program canceled
Published Nov. 9, 2007
A loan forgiveness program provided by the Missouri Higher Education Loan Authority was canceled last week with less fanfare than its introduction.
MOHELA Associate Director Quentin Wilson cited a lack of participation from students as a reason for the cancellation of the Missouri Advantage Repayment Incentive Option. He said 35 students had taken part in the program since its implementation in 2004. These students will still receive the funds allotted to them as per the terms established by the program.
The loan forgiveness program, introduced in 2004 by former Gov. Bob Holden, provided student borrowers $2,500 per year in debt forgiveness if they entered the Missouri life sciences industry after graduation.
Wilson said few MU students use the loan authority's services, and most MU student borrowers use the Federal Direct Loan Program.
According to a February 2004 release, Holden supported the measure as a way to help bolster economic growth in the state. At the time of its introduction, the measure would have charged the Missouri Department of Economic Development with the task of tracking students involved with the program after their graduation.
Wilson attributed the program's paltry participation to a lack of awareness by students.
Missouri Biotechnology Association Executive Director Kelly Gillespie said his organization would have helped to promote the program if MOHELA asked them to.
"There was a marketing opportunity lost there," Gillespie said. "We would have loved to publicized that."
The Missouri Biotechnology Association is a nonprofit trade association composed of a cross section of biotechnological and biomedical entities in both the public and private sectors. The organization advocates the establishment of commitments between higher education and the life sciences industry.
"Anything we can do to enhance the workforce is certainly something that we would be very interested in pursuing," Gillespie said.
State Auditor Susan Montee said the loan authority should have taken more steps to promote the loan forgiveness program.
"There were so many people that weren't aware that it existed," Montee said. "I'm certain that if you have a loan forgiveness program, you would have some takers."
Montee blasted MOHELA for extravagant spending during an announcement of her findings from an audit of the loan authority on Oct. 11. The recent decision by the loan authority to sell $350 million in assets to fund capital improvement projects for colleges around the state, although unrelated to the audit, was also criticized by Montee, who said money from the sale would have been better spent on affordability programs.
"They were concerned more with buying and selling loans for profit," Montee said.
Gov. Matt Blunt signed the measure authorizing the sale, which is called the Lewis and Clark Discovery Initiative, on May 23. The measure dispersed $230 million to Missouri colleges and universities in September.
MU did not receive funds from the measure.
Wilson said other loan forgiveness programs offered by MOHELA — such as programs to forgive students that become math or science teachers who work in areas of the state that face teacher shortages and a program enacted in May that forgives loans for engineering students — have been met with more success.
Wilson said about $41 million in funds intended for loan forgiveness has been distributed since 2000.
"We think loan forgiveness has a potential to keep teaching and low income students in college," Wilson said. "Affordability is a significant issue for us."