State Higher Education Commissioner Sheila Stearns has formally requested the Legislative Auditor's Office to conduct a performance audit of two student loan entities, the Student Assistance Corp. and the Montana Higher Education Student Assistance Corp.

Stearns' letter to Legislative Auditor Scott Seacat was sent Thursday.

On Tuesday, the Board of Regents voted 5-2 for a motion by Regent Todd Buchanan of Billings to seek the audit.

"We've got something in motion that the majority of the regents want to see," Buchanan said Friday. "We certainly hope it's executed expeditiously and see the findings soon."

The next step is likely for the Legislative Auditor's Office to ask Stearns to formally request an opinion from Attorney General Mike McGrath to see if it is legal for the state to audit SAF and MHESAC, which have legal opinions asserting they are private, not public entities.

SAF last week laid off 23 of its staff and quit consolidating future student loans because of financial difficulties. Although MHESAC has $175 million set aside for student locals for the 2008-09 school years, it hasn't secured funding for future years because of the national credit and liquidity crisis.