Home -> Law Blog Directory -> State Law Blogs -> Showmeblawgs

OR PHONE (866) 635-1838 for Bankruptcy Help, (866) 635-6190 for Divorce,
(866) 635-2689 for Personal Injury or (866) 635-9402 for Criminal Defense

Find a Local Lawyer

Bankruptcy (866) 635-1838
Divorce (866) 635-6190
Personal Injury (866) 635-2689
Criminal Defense (866) 635-9402

State Law

: Showmeblawgs

By stan_sipple

ADVERTISEMENTS

Tight credit markets are hurting MOHELA's contributions to educational building projects. St Louis Business Journal. Missouri's student loan authority is delaying part of a payment toward the state's college construction projects as it continues to grapple with financial losses and the tight credit market. Board members of the Missouri Higher Education Loan Authority, or MOHELA, decided March 28 to pay $2.7 million of a scheduled $5 million payment to the construction program, known as the Lewis and Clark Discovery Initiative. The authority plans to pay the remaining $2.3 million later this year if it can.

Under the state law related to the Lewis & Clark plan, MOHELA agreed to pay $350 million over several years into a fund to support capital improvements and new facilities at a number of state colleges, universities and other higher education institutions. In exchange, MOHELA was promised future allocations of tax-exempt bonding authority that it uses to raise money to finance student loan acquisitions and services. But the law allows MOHELA to withhold payments if they threaten the authority's financial footing.

Squeezed by the national credit crunch, higher interest rates on its debt and recent reductions in federal subsidies to student lenders, MOHELA has focused on maintaining liquidity and cash reserves.

In February, the student loan authority suspended its private lending and loan consolidation programs. It also eliminated 16 jobs and cut another 23 jobs through attrition.

MOHELA has lost $12.9 million since the fiscal year began July 1. This is the first time the authority has posted losses during its 27-year history.

Full post as published by Showmeblawgs on April 27, 2008 (boomark / email).