MOHELA sells assets

MOHELA's Board of Directors unanimously approved a plan that would back Gov. Matt Blunt's initiative to sell the authority's assets to a private bidder and use the profit to fund scholarships and capital improvements for the state's public colleges and universities.

Original terms of Blunt's initiative, announced Jan. 26, called for selling MOHELA outright. The sale was expected to provide as much as $425 million for schools, but it also provoked skepticism in college students and legislators who thought the agency's privatization would cause interest rates to spike.

Under the new plan, MOHELA would sell only its consolidation loans, amounting to a loan value of about $2.4 billion, according to Blunt spokesperson Jessica Robinson. By retaining ownership of its directly backed loans, MOHELA will continue to regulate interest rates.

The change could bring in $25 million more than the $425 million estimate for higher education because the ongoing value of MOHELA is greater than its liquidation value. Also, the new terms could deliver the funds up to two months earlier, Robinson said. MOHELA can begin the bidding process immediately, rather than push the proposal through the legislative process.

“MOHELA is better positioned to know and understand their own assets,” Robinson said. “With this, we'll actually see the funds as early as September.”

The original plan allocated nearly $37 million for projects at Missouri State University. Allocations of the additional funding have not been announced.

This story originally appeared in SBJ's Feb. 1 e-news Daily Update. Click here to register.[[In-content Ad]]