American School & University

Chicago schools borrow millions at high interest to provide funds for 2017-18

The Chicago public school system has borrowed the hundreds of millions of dollars it needs to start the coming school year, at interest rates about four times what a typical government with better credit ratings would have to pay.

The Chicago Sun-Times reports that a week after the school district borrowed $375 million from J.P. Morgan at an interest rate of 6.39 percent, it secured another $112 million from the same lender at 6.41 percent. The short-term borrowing known as “grant anticipation notes,” eventually will be repaid by state block grant money owed to the Chicago district but not yet disbursed because of the ongoing budget stalemate in Illinois.