Sale of loan authority could benefit state schools

Gov. Matt Blunt on Thursday announced an initiative that would put MOHELA, a nonprofit agency, up for sale. If purchased, the sale is estimated to generate as much as $450 million for higher education institutions in Missouri.

Among the funds would be $300 million earmarked for capital improvement projects at the state's colleges and universities. MSU would receive $29.7 million for its plan to reutilize its facilities and another $7 million toward the Jordan Valley Innovation Center.

An additional $100 million from the sale would go to a new student scholarship program, providing at least $5 million per year for Missouri students.

Before MOHELA is open to public bidding, a fund will be set up by Mike Keathley, commissioner of the Office of Administration, said Jessica Robinson, Blunt spokesperson. Then, a board that will handle the sale will be appointed, comprising Blunt, Keathley, Attorney General Jay Nixon, Treasurer Sarah Steelman, Lt. Gov. Peter Kinder and Gregory Fitch, commissioner of the department of higher education. A separate capital improvements bill will be introduced in the legislature.

Robinson said some are concerned that selling MOHELA could result in higher interest rates on loans, but she said Blunt is committed to preventing that from happening.

“The governor has made it very clear that he believes that, as a provision of this sale, the contract can demand that there's similar services and competitive interest for Missouri students,” she said.

Competition already exists, Robinson said, and would pressure MOHELA to keep its rates low so it may attract clientele. She added that many colleges and universities in Missouri already utilize private vendors for loan needs.

“That in itself demonstrates that the market forces are such that those interest rates and the opportunity to compete with MOHELA already exist in the private sector,” she said.

Robinson said there is no predicted completion date for the MOHELA sale, but the bidding process could begin soon.