Today the U.S. Secretary of Education Arne Duncan announced a $9.98 million grant to Local Initiatives Support Corporation (LISC) as part of the U.S. Department of Education's Credit Enhancement for Charter School Facilities Grants Program. The grant will support facilities financing to charter schools nationwide.
The Credit Enhancement for Charter School Facilities Grants Program provides assistance to help charter schools meet their facility financing needs. Under this grant program, funds are provided on a competitive basis to public and nonprofit entities, and consortia of those entities, to improve the credit of charter schools, thereby improving their access to financing for school facilities. Including this current grant, the U.S. Department of Education has awarded 31 grants, totaling over $230 million, to 19 organizations under the Credit Enhancement for Charter School Facilities Program since 2002.
LISC is a prior grant recipient under this program and continues to use the grant funds to help charter schools access financing needed to acquire, build, construct or renovate their facilities. With this new grant, LISC will create a program that will feature two strategies: 1) a National Charter Loan Fund II, a fund that provides direct lending to charter schools and is credit enhanced with ED funds, and/or 2) a Charter School Guaranty Fund, a fund that directly credit enhances tax-exempt municipal bonds, mortgages, and leasehold improvement loans for charter school facilities.
A high percentage of new charter schools point out that inadequate facilities have impeded the implementation of their charters. Unlike traditional local education agencies, charter schools generally lack the ability to issue general obligation bonds backed by property taxes, and they are often perceived to be credit risks by lenders.
The Credit Enhancement for Charter Schools Facilities Grants Program helps to improve educational options for students and parents by targeting funds to areas with the greatest need for public school choice. For more information on the Credit Enhancement for Charter Schools Facilities Grants Program, visit www.ed.gov/programs/charterfacilities/index.html.