Senate passes Blunt's higher ed plan

Gov. Matt Blunt's plan to finance dozens of college building projects with money from the state's student loan authority advanced to the House on Wednesday, passed by the Republican-led Senate over the objections of most Democrats.

The $350 million college building plan is coupled with a new scholarship program, new limits on university tuition increases and enhanced state oversight that supporters praised as a historic overhaul of Missouri's higher education system.

Critics derided the bill as an ill-conceived, morally reprehensible collection of pork-barrel projects that fails to achieve the lofty economic development goals originally touted by Blunt.

The Senate passed the bill 23-11, with three Democrats joining all but one Republican in support of it. The vote sending the legislation to the House came one week after Republicans used a procedural maneuver to shut off Democratic debate and grant the bill preliminary approval.

On Wednesday, debate was pointed but brief, as opponents acknowledged the forgone conclusion of Senate passage and some lawmakers yearned to depart for a legislative softball tournament.

Blunt praised the Senate's "bold step" as a victory for students, families and colleges.

The legislation "represents one of the broadest reforms of higher education in the history of our state," said sponsoring Sen. Gary Nodler, R-Joplin, who later added: "This bill provides more hope and more opportunity to more students than anything this Legislature has done in decades."

Sen. Rita Heard Days, D-St. Louis, countered by calling the plan "an ill-conceived, poorly executed and morally reprehensible piece of legislation."

Added Days: "It's pork at its best, and we should be ashamed that we're jeopardizing future students who want to go to college."

Blunt first outlined plans in January 2006 to sell the assets of the Missouri Higher Education Loan Authority to finance a college construction plan that focused on life sciences research and high-tech industries.

The plan has undergone numerous transformations since then, perhaps most notably shedding its medical research buildings in favor of agricultural projects in response to concerns that the research buildings potentially could have been used for embryonic stem cell research.

In retaliation for vocal opposition by two particular Democratic senators, Republicans last week axed two additional projects that were to have been built in their districts a cancer hospital and medical education center at the University of Missouri-Columbia and a pharmacy and nursing building at the University of Missouri-Kansas City.

Blunt has said he prefers his original project list, but still backs the revised bill.

The student loan authority already has set aside $212 million generated partly by selling loans held by non-Missourians toward making the bill's initial state payment of $230 million by Sept. 15. The rest of the money would be paid in quarterly installments over the next six years.

In exchange, MOHELA would get a 15-year pledge of annual tax-exempt bonding authority valued at $145 million this year that it could use to finance additional student loans. The Chesterfield-based organization currently has about $5.5 billion in assets.

Staff at the student loan authority believe the entity can sell existing loans, provide the state money, buy new loans and still remain financially sound enough to continue offering low-interest rates and loan forgiveness programs to Missouri students.

"All around, it is good for higher education," said the loan agency's executive director, Raymond Bayer Jr.

But others fear that by shrinking its assets, MOHELA will be hard-pressed to respond to stiff competition in the student loan industry and less capable of offering Missourians good deals on their student loans.

Besides the building projects, the legislation also would create the "Access Missouri" scholarship to replace two existing scholarships for students with financial need. When combined with increased funding in the state budget, the new scholarship is expected to help thousands of additional Missouri students.

The bill also would expand the "Bright Flight" academic scholarship to cover more students, and would provide the top tier or qualifiers with additional money, beginning in 2011.

The legislation would limit university tuition increases to the annual rate of inflation, with some leeway to go higher for schools with below-average tuition or for those granted special approval by the state Coordinating Board for Higher Education.

Higher ed bill is SB389.

On the Net:

Legislature: http://www.moga.mo.gov