Sunday, December 10, 2006

Squeezing MOHELA

I'm really not sure what to think of this issue. I've been watching it since it was a glint in Gov. Blunt's eye. There seems to be some sense to it. Cash in some of the assets in MOHELA and use the money on state colleges. "Assets," as I understand them, are the loans held by MOHELA. They would be, and have been at this point, sold to other loan companies for less than their yield over time for a quick payoff now. Though the assurances haven't been made in this particular article, I've read in the past that the politicians have promised that the purchasing companies wouldn't raise the rates once they own the loans. And if a politician promises it...

So, Blunt took his idea, established a board and they put it into motion. Now it has generated $17 million and colleges around Missouri are eagerly awaiting their piece. But Clint Zweifel, D-Florissant, says this isn't right. MOHELA's money should be used for MOHELA stuff, specifically lowering rates or forgiving loans. Blunt and our own Nathan Cooper, whose constituency is very interested in seeing the promised improvements on Southeast Missouri State University, say nonsense.

Here's what I keep wondering. What was that money supposed to do in the original plan? So MOHELA sold some "assets" and has more money than usual right now but what about later when these assets were supposed to be paying off? Will MOHELA have the cash to cover students' loan needs in 10 or 20 years?

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