University of Missouri endorses increased participation in MOHELA

COLUMBIA, Mo. -- Tantalized by the prospect of more than $143 million for long-delayed campus construction projects, University of Missouri system leaders on Tuesday endorsed a "good-faith agreement" to increase participation in a state-backed student loan program.

Increased use of the Missouri Higher Education Loan Authority to process and originate student loans at the system's four campuses is considered a key political hurdle to overcome concerns that scuttled Gov. Matt Blunt's previous attempt to finance a statewide university construction boom.

Under Blunt's latest proposal, the University of Missouri-Columbia would receive nearly $94 million from the $350 million asset sale, making it the largest single beneficiary. The Kansas City, St. Louis and Rolla campuses would split an additional $49 million for capital projects.

But while many students at the St. Louis and Rolla campuses use MOHELA to service their loans, those in Kansas City and at the system's flagship campus in Columbia barely use the program -- a disconnect that university system President Elson Floyd hopes to remedy.

"It is our commitment to make a good-faith effort to participate in MOHELA," Floyd told university curators at a special meeting convened Tuesday morning via conference call.

A formal vote by curators isn't needed to endorse Blunt's plan or to approve Floyd's signature on a cooperative agreement, which he said would be done by day's end. But that didn't prevent several curators, notably Blunt appointee David Wasinger, from singing the praises of the proposal.

"This governor has put higher education at the forefront," Wasinger said. "This is going to go a long way to restoring the roar at the University of Missouri."

Wasinger and Floyd noted that the university system hasn't received state money for construction projects for five years.

The meeting was scheduled abruptly after the holiday weekend to allow university leaders a chance to publicly endorse the MOHELA proposal before the loan agency next meets on Friday, Floyd said.

The legal agreement Floyd planned to sign explicitly allows Missouri's public colleges and universities to continue to use alternative loan agencies, rather than compel exclusive use of MOHELA.

But Floyd said the University of Missouri system will "do everything possible to use MOHELA as our lending institution," noting that previous limits on its use revolved around issues of customer service he thinks can be easily remedied.

After legislators earlier this year failed to approve Blunt's highly touted measure, dubbed the Lewis & Clark Discovery Initiative, the governor rolled out a revised proposal last week.

Under the latest plan, MOHELA would transfer $350 million to the Missouri Department of Economic Development over the next six years. That money then would be passed on to colleges and universities.

Blunt's legal advisers hope the newly crafted measure will mollify concerns by some lawmakers and outside observers, notably State Auditor Claire McCaskill and Attorney General Jay Nixon, both Democrats, who question its legality.