A state-chartered student loan agency is suing Wells Fargo Bank, alleging the brokerage botched a bond sale and left the agency holding the check for an interest rate more than 10 times that of other banks. Wells Fargo set the interest rates on $40 million worth of bonds at 8.08 percent in April 2009, the Missouri Higher Education Loan Authority (MOHELA) says in a lawsuit filed April 8 in St. Louis County Circuit Court. However, two other banks that also sold the agency's student loan bonds - Merrill Lynch and Banc of America - set their interest rates 0.75 percent the same week.
A judge is considering a lawsuit by student borrowers seeking to derail Gov. Matt Blunt's plan to use student loan agency money for college buildings. After more than a year of debates and changes to the plan, the Missouri Legislature this spring passed legislation to direct some assets of the Missouri Higher Education Loan Authority to college construction projects, about $350 million by Sept. 30, 2013.
A law that requires the state's college loan authority to make payments to a campus building fund is still on the books, but today the agency is spending its money on scholarships instead. Gov. Jay Nixon's proposed 2012 budget relies on a $30 million payment from the Missouri Higher Education Loan Authority to plug a cut he's proposing in the Access Missouri scholarship program.
JEFFERSON CITY -- A House committee Tuesday approved Gov. Jay Nixon's plan to cut state college and university funding by 7 percent next year. The House Education Appropriations Committee, on an amendment proposed by Chairman Mike Lair, R-Chillicothe, also included Nixon's plan to spend $30 million from the Missouri Higher Education Loan Authority to shore up the Access Missouri scholarship program. Nixon's budget director Linda Luebbering had said the money would be available but is not reflected in the budget Nixon proposed in January.
Proposed legislation that would require universities to get permission from the state before issuing revenue bonds could become a power struggle if passed. Sen. Jason Crowell, R-Cape Girardeau, filed a bill that would give the Missouri Higher Education Loan Authority, or MOHELA, the authority to approve or deny university bond projects. Right now, public universities have the power to issue their own bonds without needing the OK from the state.
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