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California School District Owes $1 Billion On $100 Million Loan

California School District Owes $1 Billion On $100 Million Loan

December 7, 2012

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All Things Considered [3 min 50 sec]

More than 200 school districts across California are taking a second look at the high price of the debt they've taken on using risky financial arrangements. Collectively, the districts have borrowed billions in loans that defer payments for years — leaving many districts owing far more than they borrowed.

In 2010, officials at the West Contra Costa School District, just east of San Francisco, were in a bind. The district needed $2.5 million to help secure a federally subsidized $25 million loan to build a badly needed elementary school.

Charles Ramsey, president of the school board, says he needed that $2.5 million upfront, but the district didn't have it.

Read more: http://www.npr.org/2012/12/07/166745290/school-district-owes...

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