In the Spotlight
LISC Publishes “Definitive Guide to Charter School Financing”

Data Supports that Investment in Charter Schools is a Good Value

LISC’s Educational Facilities Financing Center just released the "2010 Charter School Facility Finance Landscape," an updated mapping survey of private nonprofit and public financing programs for charter school facilities across the nation, including for the first time, information on charter school access to the tax-exempt bond market.  Also for the first time, the study includes performance data for both loans and tax-exempt bond issues, indicating strong performance for charter schools that have obtained financing to date. 

Highlights of the 2010 Landscape report include:

• Loan origination and performance data for the 18 major private nonprofit providers of facilities financing to charters that tend to serve the riskier schools.  Default rates for these providers are 1% of the dollar amount of loans originated and 1.5% of the number of loans, with write-offs of 0.3% of the dollar amount originated and 1% of the number of loans.

• Detailed data and rating analysis for all rated charter school bond issues through 2009 (176 total).  Default rate that resulted in loss to bondholders is 0.1% in terms of par originated and 0.6% in terms of number of issues.

• Data regarding utilization of New Markets Tax Credit allocation for charter school projects.  The EFFC polled the allocatees that mentioned charters or community facilities as a potential use of their credits and obtained their actual utilization figures ($573 million for charters for 40 allocatees that had $8.76 billion in allocation out of the total $26 billion authorized).

LISC’s Landscape series is considered the definitive study of its kind within the sector and will serve as a roadmap for individual charter schools as they strive to finance their buildings. It acts also as a policy guide for those interested in helping to rationalize the sector and develop more equitable funding for charter school facilities. 

> Download a PDF of the 2010 Charter School Facility Finance Landscape

For information on the Educational Facilities Financing Center and additional resources are available electronically at http://www.lisc.org/section/ourwork/national/education

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