Since 2002, the U.S. Department of Education (Department) has awarded 33 grants totaling approximately $242 million. Every December, these grantees submit a performance report to the Department reporting on their progress through September 30 of that year. After receiving and reviewing the reports, the Department reconciles and consolidates performance data. The cumulative accomplishments of these grantees from inception of the program through September 30, 2011, include:
- providing 428 charter schools, approximately 8 percent of charter schools nationwide, with access to financing to help them acquire, build, lease, or renovate school facilities; and
- supporting or enabling $2.71 billion in total financing for charter school facilities.
These accomplishments do not reflect the work of four grantees that have not had their grants long enough to report on their activities. As the activities supported by the grants progress over the grants’ 10- to 30-year life spans, and grant funds recycle, we anticipate that the benefits they produce will continue to grow.
Our Department data on defaults under the program, as well as data from the field, show very low default rates by charter schools. Under the Credit Enhancement for Charter School Facilities Program, only $1.21 million, or less than six tenths of one percent of all funds awarded, were lost to default. This low default percentage suggests that, contrary to the perceptions of private lenders, charter schools are not risky borrowers. These low default rates, combined with earnings on the grant funds, enable grantees to:
- Recycle funds after the charter schools repay their guaranteed facility debt;
- Increase the size of their grants; and
- Compound their leveraging.