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Democrat Proposes Study of MOHELA Sale

Last month, House Republicans released their proposal for spending proceeds from the partial sale of MOHELA, the state's student loan underwriting agency. KSMU's Missy Shelton reports on legislation from a House Democrat that urges lawmakers to take a step back before deciding how to spend the money.

Even before the governor announced plans to use proceeds from the sale of some MOHELA assets for university building projects, some Democrats attacked the idea of selling off student loans to private loan underwriting companies.

The governor has proposed using the funds generated by the sale to fund capitol improvements on university campuses around the state.

In February, House Republicans unveiled their own spending plan that gives money for capitol improvements on university and community college campuses...Their plan would allocate some of the money to paying down the state's debt.

But Democratic Representative Clint Zweifel says lawmakers should hold off on spending the money and ask whether selling some MOHELA assets is the right thing to do.

Critics of selling MOHELA say students could face higher interest rates and higher late fee penalties if their loans are sold to a private company.

Supporters of the sale say the state can write restrictions into the contract with a private company that will guarantee loan rates and late fees won't go up.

Zweifel says it's not uncommon for state government to conduct actuarial studies like the one he's proposing.

Zweifel only recently filed his bill...It must now go before a House committee for consideration.