Financing a charter school facility is challenging enough. Refinancing a charter school facility is often a larger project and has more consequences because long term debt can last for 30 years or more. The stakes can be significant when locking into long term financing.
Charter school leaders report that lack of access to adequate facilities is one of their primary concerns and one of the biggest barriers to growth. In fact, nearly one in five charter schools had to delay their opening date by a year or more due to facilities related issues. And nearly half of charter schools were in school buildings that did not have space for their anticipated enrollment in five years. Parent demand for charter schools is increasing, but facilities constraints are restricting supply.
Facilities related issues have discouraged countless school leaders from submitting or completing their application. The Charter School Facility Center is dedicated to helping public charter schools access better and more affordable facilities and facility financing.
Since the early 1970s, moral obligation bonds have been used to finance housing, higher education facilities, hospitals, corrections facilities, and more. Some states are now using this tool to help charter schools save on borrowing costs.
COVID’s impact has caused unprecedented financial uncertainties and operational challenges for charter schools across the country. Many charter operators and Boards may be considering revisiting all potential financial levers, including real estate obligations, to stabilize and support healthy o