Some student loan holders on Aug. 16 sued the Missouri Higher Education Loan Authority claiming the agency is violating its fiduciary duty to borrowers and its state-mandated mission with a pending sale of student loan assets. The suit was filed in Cole County Circuit Court.
Over the objections of House Democrats, the General Assembly in May passed legislation authorizing MOHELA assets to be used to fund construction projects proposed by Gov. Matt Blunt. The state law that established MOHELA in 1981 says the agency’s assets can only be used for the purpose of servicing low cost student loans and covering MOHELA’s necessary operating expenses.
The law allowing MOHELA funds to be used for construction doesn’t take effect until Aug. 28. The plaintiffs allege that assets MOHELA accrued under the old law cannot be used for this new purpose. Attorney John Lichtenegger of Jackson, a former Republican member of the University of Missouri Board of Curators and a vocal opponent of the governor’s MOHELA plan, is representing the plaintiffs.
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