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April 7, 2011

LePage OKs $15M student loan bond

By The Mainebiz News Staff

Gov. Paul LePage has given the green light to a quasi-governmental agency to issue up to $15 million in tax-exempt bonds to be used for student loans, after previously rejecting a similar proposal.

After meeting with Senate President Kevin Raye and the Maine Educational Loan Authority, LePage has decided to approve the authority's spring bond issue, according to a press release from the governor's office and the Maine Public Broadcasting Network. In February, LePage refused to sign off on a $31 million bond proposal for education and health care from the Maine Health and Higher Educational Facilities Authority, arguing that such bonds should be approved by voters. Traditionally, Maine residents have only voted on general obligation bonds, not those coming from quasi-governmental agencies like MHHEFA, MELA and MaineHousing. The MELA bond will help pay tuition costs for the upcoming academic year for about 900 students.

LePage decided to make an exception for MELA for one additional round of bond issuance because the agency, unlike others, does not have other funding options and because voters would not be able to approve the bond before the fall, according to the release. In the future, however, MELA will be required to put a bond to voters.

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