Fostering Charter School Growth through State Loan Programs

Finding funds to build and renovate facilities is a major hurdle for public charter schools because most state laws do not provide charter schools with the full amount of state and local funding that other public schools receive. Although an increasing number of states are passing laws to address charter school facility funding gaps, inequities persist in every state. To help close these funding gaps, thirteen states and the District of Columbia (D.C.) have statutorily enacted a charter school loan program. Of these, ten are funded and remain active--California, D.C., Florida, Illinois, Louisiana, Nevada, New Mexico, South Carolina, Tennessee, and Utah. Four states--Arkansas, Colorado, Indiana, and Rhode Island--have authorized a charter school loan program but do not currently provide funding. For this snapshot, the authors conducted a comprehensive review of state statutes and regulations to create a summary of loan programs, including such matters as funding levels, interest rates, repayment terms, and allowable uses. State officials from state departments of education, treasury departments, finance authorities, and state charter school organizations also verified the accuracy of this information. This is the fourth report in a series of State Policy Snapshots that provides the charter school community and policy makers with a more complete picture of the various types of loan funds designed to help charter schools achieve more favorable financing conditions for their facility acquisitions.