MOHELA Gaining Proper Authority

By HENRY J. WATERS III, Publisher, Columbia Daily Tribune
Published Tuesday, September 19, 2006

On Sept. 27 the board of directors of the Missouri Higher Education Loan Authority is scheduled to vote on the controversial plan to sell part of its portfolio to finance college and university capital projects around the state.

Gov. Matt Blunt insists this action is legal and financially sound. It would provide some $335 million for campus buildings and $15 million to translate university research into commercial projects. At the same time, because of ongoing bonding authority promised by the Department of Economic Development, he says the ability of MOHELA to provide low-cost student loans will not be impaired.

Attorney General Jay Nixon and others question whether the governor or the board has the authority to do any such thing without action by the Missouri General Assembly. Count me among this band of skeptics. Yet the governor refuses to send the matter to the legislature, and lawmakers acquiesce.

If the deed is done unilaterally, it will represent an excessive assumption of executive power and almost certainly will invite a lawsuit. A court will enjoin the MOHELA board from proceeding and, in my view, probably find no authority in the original statute passed by the legislature creating MOHELA.

Judging from a plain reading of the legal language one would believe proceeds of the loan authority can be used only for student loan purposes, not college buildings. If the agency’s authority is to be broadened to accommodate Blunt’s plan, an option worth serious consideration, the legislature should do it.

General Nixon says four of the seven MOHELA board members might have conflicts of interest laying them open to individual lawsuits. They represent education institutions that would receive transfers of money if MOHELA assets were sold. This possible danger would be mitigated if the board has legislative authority to proceed.

In recent days MOHELA staff members have tried to show the complicated deal would not interfere with student loan benefits. This is a debate worth having, but until the loan agency has the legal ability to do the deal at all, it is moot. To clarify this ability, legislative action should be undertaken.

Finally, legislative prerogative should be preserved and exercised. Lawmakers should have asserted their role in this matter instead of letting the administration go for it alone.
If MOHELA and the governor send this matter to the General Assembly before taking further action, they might well hurry rather than hinder the process. With proper enabling legislation, the deal can go forward without lawsuit delays and the real possibility of a permanent courtroom injunction.

In a monarchy, the king and his court get to make decisions like this unilaterally. In a democracy, the legislature has a co-equal role. In the MOHELA question, the legislature has not yet performed its duty.

I hope the funds finally will be available for capital projects on campuses without harming MOHELA functions, but to accomplish this end most surely proper governance process must be followed. Otherwise, it’s a fool’s errand.