MOHELA quietly ends life sciences loan benefits

JEFFERSON CITY, Mo. (AP) -- Missouri's student loan authority has quietly ended a program launched with fanfare three years ago to entice the state's math and science graduates to work in the life sciences by forgiving part of their student loans.

The Missouri Higher Education Loan Authority claims the program was beset by contradictory problems -- paltry participation and the potential for abuse because of an overly broad definition of "life sciences" that counted ice cream parlors, a beauty shop and farm supply stores.

But leaders in Missouri's life sciences sector say the loan authority never aggressively marketed the loan forgiveness program or sought their help. And although it qualified 941 entities as "life sciences" employers, the loan authority's list still left some people out.

Last month, without any vote by the agency's governing board, staff at Missouri's loan authority decided to halt the program. The agency will follow through on its promise to forgive up to $10,000 in loans for the 35 people already involved in the program, but no more applicants will be accepted, said Quentin Wilson, MOHELA's associate director.

The Missouri Advantage Repayment Incentive Option, or MARIO, was the Chesterfield-based loan agency's first attempt at a loan forgiveness program, Wilson said.

"We didn't realize probably at the time how challenging it is to identify a particular industry and target benefits" to those loan recipients, he said.

The nonprofit loan agency, created by a 1981 state law, was thrust to the forefront of public policy recently by the enactment of Gov. Matt Blunt's plan to take $350 million from it over several years to finance college construction projects. Also, a recent report by State Auditor Susan Montee blasted the loan agency for wasteful spending on executive perks in years past.

But when then-Gov. Bob Holden announced MOHELA's life sciences loan forgiveness program in February 2004, the loan agency still was generally operating out of the public spotlight. Holden promoted the new program as part of his plan to create jobs by investing in research and infrastructure projects.

"This program gives our students an incentive to work in Missouri following graduation and sends the message to businesses wanting to locate or expand that Missouri is a state with a highly qualified life sciences work force," Holden said at the program's kickoff.

The program offered to forgive up to $2,500 annually in loans, for up to four years, for students who graduated with math or science degrees and went to work for a Missouri life sciences company. To get the benefit, borrowers first had to apply.

"We don't have a lack of students interested in the different fields of the life sciences. I would think it would be extremely popular," said Kelly Gillespie, executive director of the Missouri Biotechnology Association. But "my sense was it was not marketed, or for some other reason, people did not avail themselves of it."

William Duncan, president of the Kansas City Area Life Sciences Institute, said he couldn't recall ever hearing about the life sciences loan forgiveness program.

Donn Rubin, executive director of the Coalition for Plant and Life Sciences, also did not recognize the program by name, though once it was described to him, he said it sounded familiar.

"If something came across my desk that said, `Here's this loan forgiveness program, please forward it to anybody who might be interested in it,' I would have a lot of people to forward it to," Rubin said. But "I've never been asked to discuss anything regarding that program that I can recall."

Some students did seek out the loan forgiveness.

Fred Scherrer Jr., who is pursuing his doctoral degree in the cellular and molecular biology program at the University of Missouri-St. Louis, said he heard of the program from Holden's announcement. Because he worked in a school research laboratory while pursuing his degree, Scherrer said he assumed he would qualify.

But documents Scherrer provided to The Associated Press show his application was denied in June because his employer -- the university research lab -- was not listed as a "life-science related company."

The official life sciences list, however, included several other University of Missouri entities, such as the Columbia campus medical and cancer centers. Also included were entities at Saint Louis University and Washington University in St. Louis.

To determine what qualified as the "life sciences," the loan agency relied on an industry classification list developed by the U.S., Canadian and Mexican governments.

Wilson said the list was address-specific, meaning a research lab in one university building might be included while a lab in another university building might not.

Whereas Scherrer was excluded because of the location of his research lab, Wilson expressed concerns that the list also could have allowed anyone working in a favored university building to qualify for the program, even if that person's job had little to do with life sciences.

Gillespie said he would have been happy to help MOHELA better define its eligible life sciences jobs.

"It's not an impossible task, someone's just got to ask," he said.

According to figures calculated by MOHELA for the AP, the life sciences program has forgiven a total of $87,000 in loans to 35 people.

By comparison, MOHELA has forgiven more than $13.5 million in loans over the past three years for more than 25,000 lower-income college freshmen who had both a federal Pell Grant and a MOHELA loan.

Starting in 2006, the agency also began forgiving loans for math and science teachers. This year, it's launching a loan forgiveness program for college freshmen enrolled in pre-engineering programs -- a suggestion from a task force Blunt appointed to study ways of enticing people into the math and science fields.

Wilson said the math, science and engineering loan forgiveness programs still could reach some people in the life sciences, or at least future teachers of life sciences students.

"We think we're getting a bigger bang for our buck," Wilson said. "It's not just life sciences, we want to be broader than that."

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