Graham, Schaefer worry about loan woes
Oct. 07, 2008
In the race for Missouri's 19th senatorial district, which includes MU, higher education issues are important to candidates' success in the election.
The financial troubles plaguing the Missouri Higher Education Loan Authority are having a noticeable effect on the state's college and universities.
Since the sale of assets from the loan authority, a condition of the Lewis and Clark Initiative proposed in 2006 by Gov. Matt Blunt, MOHELA has been late several times in disbursing the funds to Missouri colleges and universities for the projects agreed on in the initiative. In addition, the loan authority reported declining profits this year.
John Greer, who was on the MOHELA Board of Directors during the sale, said he opposed the measure.
"I pleaded with the board not to write the check for $230 million," Greer said. "The day that they voted and authorized the check would be drawn, I warned them of the things that could happen to them."
Greer said the initiative has contributed to MOHELA's financial woes.
"MOHELA does not have any money today to buy loans with," Greer said. "They have had to sell their loans to the banks and are trying to make a premium on the loans they sell to help them get their finances in order. The banks are not going to be able to pay the premium they're asking for. Banks are not interested in buying the loans at all."
Greer said MOHELA has had to lay off employees since the passage of the measure, and said the authority will need to raise interest rates considerably to stay in business.
"They've abandoned the students it was created for. They've abandoned that idea and wanted to build buildings with it. That's wrong," Greer said.
Sen. Chuck Graham, D-Columbia, and his Republican opponent for the 19th district, Kurt Schaefer, both said stem-cell research should not be restricted by the measure.
"It would have created a permanent 800 to 900 jobs," Schaefer said in reference to the state's life sciences industry. "When the university does well, the state of Missouri does well. Research that's done at the University of Missouri provides benefits for the entire state."
Schaefer said he acknowledges problems with MOHELA and would work to improve the loan authority if elected.
"I think MOHELA was a solid idea at the time," Schaeffer said. "It's always worth going back and looking at those things and seeing if they're still necessary."
Graham said he didn't support the restrictions on stem-cell research in the measure because the legislation would have been damaging to the university.
"The very next day they're going to have a bill that says in our science classes at the university we have to teach that the earth is only 6,000 years old and dinosaurs don't exist," Graham said. "That's the very next thing that comes down the pipe. You've got to be smart about how you pay for these things".
Graham said that if Blunt was serious about funding higher education and had a small surplus in the state budget, the state could have paid for the construction.
"MOHELA got run into the ground by the governor," Graham said. "They're raising interest rates on student loans, making it harder to afford college and that's a big, big problem."
Included in the original initiative was an $85 million appropriation to MU to fund a new Health Sciences Research and Education Center. However, Missouri Senate Republicans stripped the appropriation from the measure after Graham opposed the bill.
Graham filibustered the bill in 2007 after provisions prohibiting stem cell research were added to the legislation.
In February, $31 million from the sale was approved for appropriation to MU for the Ellis Fischel Cancer Center.