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It's expected that when Governor Matt Blunt visits the Missouri State University campus later today, he'll announce his support for selling the state's student loan agency. KSMU's Missy Shelton reports.
According to documents obtained by KSMU and the Associated Press, Governor Matt Blunt plans to ask lawmakers to form a five-member board to take bids for MOHELA, the Missouri Higher Education Loan Authority.
State lawmakers established MOHELA in 1981 as a non-profit entity that uses tax-free bonds to underwrite student loans, resulting in lower interest rates...MOHELA reports that more than half a million students have taken advantage of the program.
Under the governor's plan, proceeds from the sale of MOHELA would fund capitol improvement projects at universities around the state...community colleges are not listed as receiving any of these funds...The proposal would give nearly 37 million dollars to Missouri State University. Part of that would go into the Jordan Valley Innovation Center, known as J-VIC...But the bulk of the money would help fund the renovation of existing buildings.
Missouri State President Michael Nietzel.
The governor's pending announcement drew a variety of responses from state lawmakers.
Some say it will provide much-needed funds for capitol improvements...Others worry that student loan interest rates will go up if they're underwritten by a for-profit company.
Springfield Democratic Representative Sara Lampe says selling MOHELA gives the state some quick cash but sells students short.
Some lawmakers say the state will be able to stipulate terms of the agreement through the competitive bid process.
Springfield Republican Senator Norma Champion says she believes the state can put safeguards into the contract to ensure student loan rates don't skyrocket.
But the idea of negotiating the terms of the sale to protect student loan rates doesn't make Representative Sara Lampe more comfortable with the idea of selling MOHELA.
Some lawmakers say they haven't decided whether they support selling MOHELA.
Republican Representative Jim Viebrock says he likes some aspects of the proposal...But he says using the proceeds for new campus buildings could create financial problems for the state.
The head of MOHELA was replaced Tuesday evening after the MOHELA Board of Directors approved a resolution indicating it will cooperate with the governor on his proposal to sell MOHELA's assets.