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The MOHELA board that oversees the state's student loan authority voted today to sell half of MOHELA's assets. Board members say proceeds from the sale will go toward Governor Matt Blunt's capitol improvement plan for universities, endowments and scholarships. KSMU's Missy Shelton reports.
The board voted during a hastily called meeting that took place in the governor's office.
The vote to sell roughly half of MOHELA's 5 billion dollars in assets was unanimous.
MOHELA stands for Missouri Higher Education Loan Authority...It's a non-profit agency that underwrites student loans using tax free bonds, which enables MOHELA to offer low interest rates on loans.
Karen Luebbert is chair of the MOHELA board.
She says the state will be able to ensure that interest rates on student loans stay low by putting it in the sale contract.
Some for profit national student loan companies have faced criticism for what some call high penalties on students who default on loan payments.
When asked about that, Governor Matt Blunt had this to say.
Critics of the proposal say they're not convinced the governor can get guarantees that loan interest rates will stay low.
Democratic Senator Victor Callahan says he believes the governor pressured the MOHELA board into approving the deal.
Callahan says he's disappointed that lawmakers did not have a chance to vote on whether to sell half of MOHELA's assets.
Funds generated by the sale of half of MOHELA's assets will generate more than 425 million dollars...Governor Matt Blunt has proposed putting that money into capitol projects at universities, endowed professorships and scholarships.