TREASURER ANNOUNCES STUDENT LOAN PROGRAM

One month into the new state fiscal year, State Treasurer Wendell Bailey says revenues are flat and there is no indication the recession is easing in Missouri.

"We just haven't seen the up tick in the economy yet that other parts of the country are apparently starting to see," declared Bailey, at an airport news conference Wednesday.

The treasurer also announced that $10 million has been set aside to provide low interest student loans, under the state's MOBUCKS program. These loans are now available from financial institutions around the state.

Bailey pointed out that the state budget for the fiscal year that began July 1 is based on growth of 2.8 percent. He added that because of the slow month, he had to use $85 million of the state's $185 million reserve fund this month.

Normally, Bailey noted the fund has not been needed until October. By law, the cash operating reserve fund must be paid back by May 15, once state income tax money comes in during the spring.

Based on July's revenues, Bailey said it appears that Gov. John Ashcroft's decision to veto some funds from the Fiscal 1992 budget and to withhold other funds was justified as a precaution.

With "no relief in sight yet," Bailey said it is possible that Ashcroft may not be able to release some of the funds that have been withheld. He stressed the need to keep a close watch on state funds and said he hopes to see some kind of economic turnaround in the state soon.

The MOBUCKS student loans will provide interest rates at 7.5 percent, with payback terms to be negotiated between the borrower and lending institutions," Bailey explained.

He pointed out that the state had $10 million set aside three years ago for drought relief in Northwest Missouri that had not been loaned and was made available for students.

Bailey said state law gives the treasurer a lot of leeway in how to make the funds available, however, it does stipulate that "the borrower must have applied for and received all the basic student assistance they are eligible for."

One category of people that should benefit from this program, Bailey said, are families with too much income to qualify for conventional student loans.

At the University of Missouri, that would be a family making $40,000 a year or more. For Southeast Missouri State University the figure would be a little less, said Bailey.

A second group that will benefit from the MOBUCKS program will be those who have already received all the loans they can but need additional money for attending school.

"We think this is going to have a very significant impact in providing loans to students," Bailey said.