Lowering the Cost of Capital for Public Charter Schools

As the public charter school sector continues to mature, more schools than ever are accessing the bond market to finance their next school building. As they do so, the interest they pay is funded by a school’s operating costs (which are provided through taxpayer dollars), meaning every extra basis point in interest represents fewer dollars available for textbooks, teacher salaries, and field trips.

As states seek to use their education budgets more efficiently, moral obligation bonds are an attractive option to lower interest rates without overburdening the state’s balance sheet. Take a look at how and why some states are turning to moral obligation bonds to fund charter school facilities.