• Tuesday, May 29, 2012
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Threat of Lawsuit Delays Plan to Finance Buildings With Student-Loan Profits

The governor of Missouri’s plan to finance construction projects at state colleges and universities by selling off hundreds of millions of dollars in student loans has been stymied by a legal threat from the state attorney general’s office, the Associated Press reports.

The board of the state’s student-loan agency, the Missouri Higher Education Loan Authority, was scheduled to vote on Friday on the plan, but postponed the vote after learning that an assistant to the attorney general, Jay Nixon, had said that any board member voting for the measure could be sued for violating his or her fiduciary duties or, in one case, for conflict of interest.

Gov. Matt Blunt’s office characterized the attorney general’s alleged actions as a “blatant abuse” of power.

The Republican governor and state lawmakers had only recently agreed on the plan, after similar proposals to raise money for higher education were defeated.