However, Republicans said Missouri Higher Education Loan Authority's losses had nothing to do with Blunt's legislation and were the effect of the national economic crisis.
The loan authority has given $240 million to the higher education for building projects under Blunt's Lewis and Clark Discovery Initiative so far. Blunt's plan envisioned that MOHELA will turn over a total $350 million.
John Greer, a former MOHELA board member, said any politician that sided with the governor was short-sighted and narrow minded.
MOHELA has only paid $100,000 of a $5 million payment due in June and will owe another $5 million at the end of September.
Rep. Rachel Storch, D-St. Louis City, said MOHELA is in shambles because of the sale and is not fulfilling it's mission of providing loans to college students.
"For the first time in it's history MOHELA is now experiencing very severe financial difficulties," Storch said. "Gov. Blunt put us in a position where putting up new buildings on campus is coming at the expense of young people in Missouri who are struggling for a college education."
Sen. Chuck Graham, D-Columbia, who was one of the major opponents to the original sale, said MOHELA's inability to make its payments was disappointing, but not unexpected.
"Last April I asked Gov. Blunt to work with the Office of Administration and the (Coordinating Board for Higher Education) to develop a plan to get MU the $31 million it was promised," Graham stated in a news release. "No action was taken, and now the fund had less money to work with."
Sen. Scott Rupp, R-St. Louis, who supported the bill, said President George Bush's $700 billion bailout would balance the national economy, which in turn would help to diffuse MOHELA's credit issues.
"MOHELA would be experiencing these same issues if we would have passed this bill or not because of the changes that were done on the federal government, the student loan market, and the credit crisis," Rupp said.
If the loan authority was unable to make all of it's payments, Rupp said the legislature would have to consider an alternate plan.
"We still want to continue with the spirit of what we passed with the Senate bill and move forward," he said. "We just have to look at what is a feasible way in light of all the new financial issues of how to reach the goal we outlined."
Rep. Clint Zweifel, D-St. Louis County, who is the Democratic candidate for state treasurer, said the governor should get an outside opinion on the issue from a market perspective.
Both Storch and Zweifel criticized Republican candidate for governor and Congressman Kenny Hulshof for supporting the initiative.
"I think it's important that Congressman Hulshof explains why he still believes gutting MOHELA was the right thing to do or take action and take a position on how to correct it," Zweifel said.