MOHELA board advised to halt sale

JEFFERSON CITY — The Missouri Higher Education Loan Authority saga continued Thursday with two major developments: an analyst advising the members of the loan authority to halt the MOHELA sale and the president of the University of Missouri System making concessions about stem cell research.

In an e-mail to MOHELA board members, which circulated in the Capitol on Thursday, the chief financial firm that the governor often cites to give validity to the proposed sale, said its original report may not be valid.

The firm, Liscarnan Solutions LLC, stated in the e-mail that MOHELA should immediately cease financial activity until the firm can re-evaluate the proposal to ensure MOHELA’s ability to meet funding requirements and the loan authority’s long-term viability. The e-mail stated the firm is now questioning the validity of MOHELA’s future business activity and related cash flow projections.

The e-mail also stated the firm may not know more about the higher loan authority’s future until March or April because of statutory changes to the Higher Education Act currently being considered by the U.S. House of Representatives. As proposed, the act would gradually cut the interest rate charged to undergraduate student borrowers.

In a news release, Scott Giles, MOHELA’s chief financial officer, stated he remains confident that the funding program is feasible.

The release also stated the loan authority has a reserve fund capable of making 24 quarterly installments of $5.8 million.

“At this time, nothing has changed and I remain confident that MOHELA will be in a position to continue making the quarterly installments of $5.8 million,” Giles stated in the release.

The governor’s spokesperson, Jessica Robinson, said she had not yet had an opportunity to review the documents and could not make a statement.

The Democrats in Missouri’s Senate circulated a paper Thursday that outlined the firm’s e-mail.

“This e-mail is a major blow to the chances of (Senate Bill) 389 passing since Liscarnan originally issued a report justifying the Republican’s proposal,” the newsletter stated. “Now that Liscarnan has withdrawn its support, there is no justification to pass what Democrats have been calling a risky scheme.”

The proposal has been caught up in the Senate Education Committee, with buildings funded by the proposed sale being deleted from the bill and then added back a few days later. One of the buildings in question is a health sciences center on the MU campus.

In a surprise twist Thursday, UM System President Elson Floyd proposed in a meeting with Missouri journalists that no medical research would be done in buildings built through funds from the proposed MOHELA sale. The health sciences center would instead house a cancer treatment facility and classrooms.

Last week, when lawmakers removed funding for the buildings from the Lewis and Clark Initiative, UM System spokesman Scott Charton said the projects were critical to the university.

“We’re going to treat cancer and teach doctors, and that’s all we’re going to do,” Charton said.

Floyd said his proposal would remove all medical issues involving MU from the initiative.

Floyd spoke with Education Committee chairman, Sen. Gary Nodler, R-Joplin, at the MU men’s basketball game Wednesday about his plan, Charton said. Charton said Nodler liked the proposal and Floyd spent Thursday morning contacting the UM System Board of Curators about the idea.

Charton said the president’s office attempted to contact each of the curators, but curator David Wasinger said he was unaware of Floyd’s comments.

“This should clear away any question about whether stem cell research would occur in a University of Missouri structure paid for with proceeds from the Lewis and Clark Discovery Initiative,” Floyd said in a news release issued Thursday. “This also removes any question about protecting the university’s academic freedom.”

The promise that no stem cell research would take place in MOHELA-funded buildings is not good enough, said Pam Fichter, president of Missouri Right to Life , which is a group strongly opposed to stem cell research. The group has been vocal about its disapproval of state funds going to support stem cell research at universities.

“How could that be enforced according to the constitution?” Fichter asked. She said she wonders if others are going to be obligated to follow Floyd’s proposal once he leaves in June.

Senate Democratic Leader Maida Coleman said she was glad Floyd was able to extend an olive branch but didn’t like Missouri Right to Life’s response.

“I think the universities want to get it done, and it’s unfortunate when a university like the University of Missouri is willing to make a concession and they still get beat over the head,” Coleman said.

Sen. Chuck Graham, D-Columbia, said Floyd’s proposal is unrealistic and that Floyd does not understand the political realities of the bill. He said that when the buildings were placed back on the bill last week by committee chairman Nodler, the bill was packaged so that if any part of the bill is challenged, the whole bill would fail.

Graham said he does not understand why Nodler packaged the bill that way.

“His bill, in its current form, makes it virtually impossible that anything will ever be built,” Graham said.