If you look more completely at the deal it actual is a good deal for the school district. They will pay a total of $34 million over 20 years to obtain $25 million. So their effective total interest is only $9 million, which works out to about 2% per year... an excellent loan rate for anyone. What is hidden in that is that the other $23 million (34-9) in interest that is "free" to the school district is actually paid by all of us as taxpayers. If given the opportunity why not have taxpayers across the country finance your school district? I would fire any superintendent who DIDN'T take that deal. I'm not arguing that this is a morally correct thing to do, just that it makes good financial sense from the superintendent's perspective.
This is not what the article states. The article says they will pay a total of $34 million to receive a $25 million federally subsidized loan. Presumably the principal and interest on the $25 million must be repaid as well, so the actual cost of that $25 million is somewhere north of $60 million.
Fair enough. Let's assume they are getting $27,500,000 (adding the private loan with the federal loan) and let's assume they will repay $70,000,000 after 20 years. We still come up with an effective interest rate of 5%. Still not a bad deal.
Except where did they plan to come up with that money? School budgets don't tend to grow that fast and building a new school adds additional costs. I'm not arguing that new schools shouldn't be built but taking on large debts without clear plans.
