In recent months, the press has followed the moves of the Missouri Higher Education Loan Authority (MOHELA) and Governor Matt Blunt's plan to sell its assets in an attempt to invest in campus construction. The latest development in the MOHELA story is a plan proposed by Senate Democrats.
Blunt's initial proposal called for a transfer of $350 million from Missouri's student loan agency to campus-enhancement projects. His belief is that financing the buildings in which future students will learn will perpetuate success. However, his opponents state that the same future students will have greater problems with affording loans as a result.
Last week, nine Democratic senators signed on to a bill stating that they wish to preserve MOHELA's assets while expanding student financial aid and financing campus construction statewide. Ultimately, the new plan is an alternative route to reach the same goal outlined by Blunt. However, the ways in which the two sides would like to go about achieving that goal are significantly different.
In direct contrast to Blunt's program, the Democratic proposal would take a smaller portion—1.5%—of MOHELA's assets each year for an indefinite number of years. The senators insist that this new bill would assist MOHELA with maintaining all of its assets and still fulfill the intention of disbursing low-cost student loans and accessible financial aid plans.
Senator Wes Shoemyer voiced support for the plan and his party, saying, "Instead of selling off our assets, we as Democrats would be encouraging MOHELA to grow and invest."
Governor Blunt questioned the financial validity of the plan, and there is doubt that the rest of MOHELA's decision makers will change their minds and work against Blunt's plan—especially since it's been approved for nearly a year.
"I don't see MOHELA going back and redoing this," said John Smith, the board's chairman. "We've already made our decision."
If the Democrats' plan is pushed through, however, decisions regarding allocation of assets could bypass the MOHELA board's approval. After MOHELA turned over the required portion of its assets, the state would use about $38 million of what it is already spending on student aid to buy bonds to finance the $350 million in building projects. The state would pay debt service for those bonds each year.
Jessica Robinson, a spokeswoman for the governor, criticized the Democratic plan for its dependency on debt. "It's like buying a car on credit when you have the money to pay for it now," she said.
Yet Democrats stand behind their claim that their plan is logical because they are utilizing MOHELA's financial position in a dependable way to repay the bonds.
Article Title : More MOHELA Changes
Comment not found for this article.
Share this story:
EdFed introduces… Awareness… Learnal
At, EdFed, we proudly introduce 'articles on student loans' and 'Learnal - the journal to learn from', our free newsletter on student loan management, which is sure to keep you informed of the latest events and happenings in the student loan market. To receive your copy of the above just use the RSS feed below and add this to your "My Yahoo", blogs, newstickers, and other similar channels accepting distributable content.
Click here to sign up for our Weekly Newswire now!
How EdFed Helped others!
EdFed saved me thousands of dollars! They gave me a low-fixed interest rate, borrower benefits, and low monthly payments. My loan counselors walked me through each step of the application process, and I felt very comfortable with my choice to consolidate with EdFed. I recommended EdFed to several of my classmates, and they too have had great experiences. I am so glad I found out what EdFed has to offer, there really is a difference between lenders! - David G. Dallas, TX
Student Loan Consolidation Info - How to Choose the Right Loan Company
The Career Resources column is presented by Granted, America's leading job search engine dedicated to getting people jobs.
Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.