Lawmaker seeks to block MOHELA plan

A Democratic state lawmaker plans to introduce legislation to block the use of Missouri Higher Education Loan Authority funds for construction projects on state college campuses.

Rep. Clint Zweifel, D-Florissant, said the loan authority has no business funding campus projects. "MOHELA's sole mission is to provide low-cost student loans so a college education is attainable for most Missourians," he said Friday.

"Selling assets to pay for new buildings is not part of that mission, nor should it be. MOHELA's focus must remain on students, not brick and mortar," he said.

The board of directors voted unanimously Nov. 29 to move forward with a plan to provide $350 million to the state for campus construction projects and economic development. That includes $17.2 million for Southeast Missouri State University's River Campus project and $4.5 million for a bioscience incubator facility at the university's planned research park.

The MOHELA board has started setting aside money that would be transferred to the state if the legislature approves the plan.

State Rep. Nathan Cooper, R-Cape Girardeau, believes the Republican-controlled legislature will approve the plan despite Zweifel's efforts.

"The board voted to set up a separate account," said MOHELA executive director Raymond Bayer Jr. "We had $65 million on hand. It's now up to $71 million."

Within a month, the agency expects to have more than $150 million in the fund, Bayer said.

All of that is coming from money pooling in dozens of accounts, he said.

The agency also recently sold $130 million in student loans, part of a plan to sell $1.5 billion in out-of-state consolidation loans.

Bayer said MOHELA won't sell any loans made to Missourians or students attending Missouri schools.

Gov. Matt Blunt has sought since last January to tap into MOHELA's approximately $5.9 billion in assets to finance his higher education initiative.

His revised plan failed to win legislative approval in May.

Blunt and his appointed MOHELA board members reached a new agreement in late September, contingent upon legislative approval.

Paying over six years

Under the plan, the Chesterfield, Mo.-based loan authority would pay $350 million over six years to the Missouri Development Finance Board. That board then would pass $335 million on to public colleges and universities for new and improved buildings. The other $15 million would go to the Missouri Technology Corp. to attract high-tech businesses and spin off university research projects into commercial products.

Zweifel argues that the plan to use MOHELA funds goes against state law. "MOHELA is not a piggy bank for politicians to crack open to pay for pet projects," he said.

His bill would require the quasigovernmental agency to pump any excess assets into lowering loan rates and forgiving student loans.

"That money should be serving students," he said.

Zweifel said he doesn't question the legitimacy of the campus projects, only that the state should look at other ways to fund them.

He suggested the state could use some of its expected surplus of tax revenue and issue general obligation bonds to fund the projects. Zweifel said state officials are expecting a surplus of $300 million to $500 million.

He claimed the MOHELA board failed to obtain an independent financial analysis of the funding plan as many lawmakers wanted. "I have lost confidence in their direction," Zweifel said.

However, Bayer said MOHELA received an analysis from a financial consulting firm that isn't involved in the sale of any of the student loans. That firm, he said, won't benefit from the sale of any of the loans.

"I am confident we got a truly independent, objective analysis of the plan," Bayer said.

Southeast president Dr. Ken Dobbins said he hopes the MOHELA plan wins legislative approval early in the legislative session that begins in January.

"I think that higher education has been on the back burner because of many other priorities and lack of revenue for this state for probably the last six or seven years," he said.

"I am hoping that the governor and General Assembly focus on making sure higher education gets its fair share," he said.

mbliss@semissourian.com

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