First MOHELA money sent to colleges

JEFFERSON CITY, Mo. -- The state distributed $39.4 million Monday as the first installments of Gov. Matt Blunt's higher education initiative.

A new law championed by Blunt calls for the Missouri Higher Education Loan Authority to pay the state $350 million over several years, the bulk of which is to be spent on dozens of college construction projects around the state.

The loan agency made its initial $230 million payment to the state last month.

The first portion of that money now has been paid by the state to several projects:

• $16.5 million to the Southeast Missouri State University River Campus.
• $8.5 million to the Missouri Technology Corp., which in turn is to distribute the money to other projects linking university research and businesses.
• $7 million to the Northwest Missouri State University Plant Biologics Center.
• $4 million to St. Charles and East Central community colleges.
• $3.3 million to the University of Missouri-Rolla Engineering Building.

A lawsuit by student borrowers had sought to block the transfers by claiming the money should instead be used to reduce interest rates and forgive student loans. A Cole County judge refused to issue a temporary restraining order last month but the lawsuit is pending.