MOHELA delays payments to Ellis Fischel

The state student loan agency has already delayed payments to fund the center.

By Katie Moritz

Published Sept. 26, 2008

Missouri's primary student loan agency is struggling to keep up with the promises it made to public colleges and universities in Missouri, including more than $30 million slated for a cancer hospital at MU.

The Missouri Higher Education Loan Authority is supposed to deposit $5 million each quarter, through 2013, into an account that would fund construction projects in all of Missouri's public universities, according to a law passed in 2007.

MU is anticipating $31.2 million of this money to fund the development of a cancer hospital.

MOHELA made only a partial payment in June, when $5 million was due. On Wednesday, the agency announced it would be missing its September payment because of insufficient funds.

In a news release, Sen. Chuck Graham, D-Columbia, said he is concerned about the future of Ellis Fischel.

"I share the concern of UM officials who now wonder whether the money for Ellis Fischel will be there when it is needed," Graham said in a news release.

Graham and UM administrators said they are worried that with the inability of MOHELA to make good on its promises, Ellis Fischel will not be built as scheduled.

Graham's chief of staff Ted Farnen said the senator asked Gov. Matt Blunt to release the funds for Ellis Fischel early. However, Farnen said Blunt did nothing in response.

Blunt spokeswoman Jessica Robinson declined to comment.

MOHELA's inability to make its payments to Missouri universities is only one example of the company's financial distress. MOHELA announced a loss of $2.2 million in 2008 and has ended two programs meant to cut interest rates for student loans, Graham's release stated.

"This is not a new issue," Farnen said. "The bad part for students is that a lot of students get their student loans directly through MOHELA."

Nikki Krawitz, UM system vice president for finance and administration, said students who rely on MOHELA's loans might be impacted by the unavailability of funds.

"The loans may be harder to get because there is less money to give to students," Krawitz said.

Graham said he is disappointed in how MOHELA's construction plan has worked out.

"It's pretty sad when the state's student loan authority has become one of the state's worst credit risks," Graham said.

Krawitz believes the funding will be available for Ellis Fischel Cancer Center, which is a part of a bigger project for University of Missouri health care.

"We feel that the state will hopefully deliver on the promise of that funding," Krawitz said. "If MOHELA cannot fulfill its promises, we hope that the state will find other resources to use."