Kris Turner, writing a story that appeared at the Lafayette Journal & Courier, reports that the State has released details about a loan program for charter schools.
The program gives charters access to $50 million in state-funded loans and comes on the heels of the state’s forgiveness of $90 million in charter school loans in 2013.
$140 million here, $140 million there, and pretty soon we’re talking about real money. Let’s invest in our public schools.
The loans carry a 1% interest rate and will theoretically be paid back within 10 years. The loans are further secured by the facilities that are built with the loan proceeds. However, I’m not sure what the re-sale proceeds are on a defunct school building if you foreclose on them.
And, there is still the possibility that, like the $90 million loan that came before, this new $50 million loan will be forgiven by the State:
In 2013, the state forgave and paid off more than $90 million in charter school loans. The move drew protests from traditional public schools whose loans were not forgiven and consequently charter schools were no longer given access to the loan money.
Kenley said Pence and House Speaker Brian Bosma plan to do the same thing again with the new loan program — an assertion that neither denied outright.
. . .
[T]he new loan program . . . gives charter schools access to up to $50 million in loans from the state’s common school fund.
The fund has about $170 million available — money that would normally be reserved for traditional public school loans for construction and technology purchases. Now, charter schools can access nearly a third of the funds at an interest rate of just 1 percent.
. . .
Overall, 43 of the state’s 79 charter schools already have outstanding obligations, for a collective debt of about $120 million.
Traditional public school districts carry much larger debt loads, but those loans are typically backed by property tax levies, making them relatively safe bets. Of the 655 outstanding common school fund loans to traditional public schools, none are behind on payments, according to the state treasurer’s office. Nor have any traditional public school loans been forgiven.
Charter schools, on the other hand, are less predictable. Several of the charter schools whose loans were forgiven in 2013 ceased operations shortly thereafter.