Creative lending

Friday, May 25, 2007

MOHELA has become part of the vocabulary of anyone who follows the political scene in Jefferson City, Mo. The acronym stands for Missouri Higher Education Loan Authority, which is the agency set up to underwrite student loans across the state. Thanks to MOHELA, thousands of students have obtained loans for college at rates more favorable than national averages.

Along the way, MOHELA created a portfolio worth somewhere in the neighborhood of $5 billion. Last year Gov. Matt Blunt suggested one way of raising a large amount of cash for state-funded building projects at colleges and universities would be to cash in on MOHELA's assets while, at the same time, continuing to provide low-interest-rate students loans.

Politics being what it is, the proposal got bogged down as legislators rushed to divvy up the pot. By the end of this year's legislative session earlier this month, a plan -- called the Lewis and Clark Discovery Initiative -- had been crafted that passed muster. Blunt was in Cape Girardeau Thursday to sign the bill at Southeast Missouri State University's River Campus for the arts, which is one of the beneficiaries of the funding.

While the dust was settling on the Lewis and Clark plan, MOHELA continued to go about the business of helping students. This week it announced two programs to help teachers of math and science and engineering students.

Math and science teachers in their first five years of teaching can have up to $2,500 a year of their student loans forgiven. The aim it to offer an incentive to keep these teachers in classrooms rather than moving to the private sector.

MOHELA also said it would also offset $3,500 a year of student loans for freshmen pursuing engineering degrees, an attempt to attract more engineers. The program recognizes the need for more engineers.

Both programs should be attractive to teachers and engineering students, and the programs are examples of ways funding can be maximized far beyond traditional student loans.

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