Report Released on Implementation Study of the Credit Enhancement for Charter Schools Facilities Program
For Immediate Release: April 2008
Optimal Solutions Group, LLC (Optimal) recently completed the Implementation Study of the Credit Enhancement for Charter Schools Facilities Program under a contract with the U.S. Department of Education’s Office of Planning, Evaluation and Policy Development. The program was established in 2001 to address a critical problem faced by many charter schools – lack of suitable facilities and inability to obtain financing to secure suitable facilities. The program makes competitive grants to eligible public entities to provide credit enhancements to absorb some of the risk of making loans to charter schools.
Optimal’s research team, which included Kenneth Temkin, Ph.D, Grace Hong, Ph.D., and Laurel Davis, MCP, guided the multi-year study to find that the grantees included in this study provided credit enhancements that facilitated a total of $168 million in loans to 84 schools that served over 23,000 students between FY 2003 and FY 2005. Demographic information obtained from the Common Core of Data, the U.S. Census, and representatives of assisted schools indicated that students in the assisted schools are more likely to be low-income and minority than are students enrolled in all charter schools and all U.S. public schools.
According to grantees, commercial lenders, and other participants in the facilities lending market, many of the assisted schools would not have received facility loans at any price before the program, since lenders believed that these schools reflected a prohibitively high level of risk. With the credit enhancements made available by the Program, assisted schools received loans with rates and terms that were better than would otherwise be available.
The full report can be found at http://www.ed.gov/rschstat/eval/choice/charter-school-facilities/index.html.
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Optimal Solutions Group, LLC is a nonpartisan, public policy research consulting firm in the Baltimore-Washington metropolitan area. Optimal is committed to supplying insightful program evaluation, cost-benefit and effectiveness analyses, custom econometric modeling, and market analyses for decision makers in both the public and private sectors.
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