The financial viability of the state agency that handles millions of dollars in college student loans becomes an issue in discussions of a plan to make the agency stronger financially.
The Missouri Higher Education Loan Authority’s financial health has been in question by some lawmakers since the legislature approved the sale of 350-million dollars of its assets last year. Backers of a new plan to let MOHELA originate federally-guaranteed student loans–rather than just service them–say their bill will let the agency earn more money and become more stable.
Senator Chuck Graham of Columbia, a strongly vocal critic of the asset sale, says he’s not sure MOHELA will survive long enough for the new program to go into effect. He says MOHELA is having trouble meeting its payroll,
has laid off dozens of employees, and recently delayed a five-million dollar quarterly payment to the state because of cash flow problems. He says the market isn’t getting better for them and more people are defaulting on their student loans.
Sponsor Rob Mayer of Dexter is sure MOHELA will survive. But he says the legislature cannot delay action on his plan. He thinks his bill will the agency’s income by about four million dollars a year from interest paid on the loans it would be authorized to originate. Despite the criticisms, the Senate has approved the bill. The next move is up to the House.