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MOHELA to sell half to fund Governor's plan

January 31, 2006
By: Hayley Salvo
State Capital Bureau

INTRO: In a surprise move this morning, the MOHELA board voted unanimously to put half of the company up for public bid to fund Governor Blunt's Lewis and Clark Discovery Initiative. From the state capitol, Hayley Salvo has more.

MOHELA, the government agency that underwrites student loans, will sell off about half its assets to fully fund the Governor plan. The $450 million dollars raised from the sale will be spent on capitol improvement projects and scholarships at state universities. In a press conference with the MOHELA board, the Governor called the plan a win-win situation.

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"MOHELA will continue to provide the same services to future Missouri students that they provide today and they've agreed to do that, so this is a significant win, win, win for everybody involved."

A fellow Republican, House Speaker Rod Jetton, expressed concern that Missouri students could still pay the price with higher interest rates on their loans.

But MOHELA board chair, Karen Leubbert, says any company that purchases the loans would be contractually obligated to the same interest rates as MOHELA serviced loans.

From the State Capitol, I'm Hayley Salvo.

INTRO: It's not the original plan, but Governor Blunt and the MOHELA board have come to an agreement that will keep MOHELA open and still fund the Lewis and Clark Discovery initiative. From the state capitol, Hayley Salvo has more.

The MOHELA board has agreed to sell around half the agency's assets to foot the bill for the Governor's $450 million dollar plan for capitol improvements and scholarships at state universities. The Governor called it a win-win situation for everyone involved, but some state legislators aren't convinced. They say Missouri students could still face higher interest rates when repaying their loans.

But MOHELA board chair, Karen Leubbert, says the loans sold to a private lender could be contractually bound to offer MOHELA interest rates.

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We will do what we can to protect the rates that MOHELA has right now to ensure that they are carried over to the purchaser.

In Jefferson City, I'm Hayley Salvo.

INTRO: It's not the original plan, but the Governor and MOHELA board have found a way to fund the Lewis and Clark Discovery Initiative and keep MOHELA up and running. From the state capitol, Hayley Salvo has more.

MOHELA, the government agency that underwrites student loans, needs to raise $450 million dollars to foot the bill for the Governor's plan for capitol improvements and scholarships at state universities. To do that, MOHELA plans to sell off half its assets to a private lender. Governor Blunt touted the plan as a win-win for everybody involved but Senator Victor Callahan of Independence isn't convinced. He says the plan is a risky move.

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This decision took place without coming to the legislator, dully elected by the people. And so he's essentially sold the public asset through pressure or otherwise that will jeopardize the education of thousands of current students and students in the future.

But MOHELA board chair Karen Leubbert says any company that purchases the loans would be contractually obligated to the same rates as MOHELA serviced loans.

From the state capitol, I'm Hayley Salvo.