Chicago Public Schools to pay $850 million in interest on $500 million loan

Big money for the Chicago Public School system that's so far in debt already they can't figure out what else to do.

Not only financial failures, but they have a real efficiency problem as well.

Now they go and borrow $500 Million and agree to pay off over extended time and get zonked for $850 Million in interest alone, not counting the administrative costs either.

WTF ?

Chicago Public Schools to pay $850 million in interest on $500 million loan

In July, Chicago Public Schools borrowed $500 million in long-term, high-interest loans. These loans, taken out at interest rates between 7.25-7.65 percent, will cost the district more than $850 million in interest costs alone for a total cost of $1.35 billion, according to a Chicago Tribune analysis.

CPS will pay off the loans over 25 years, paying roughly $35 million a year in interest. Adjusted for inflation, the total value of the interest on the loan is roughly $405 million.

As the Tribune notes, by the time the loan is paid off, CPS students entering kindergarten this fall will be in their mid-30s.

Big fail as usual for anything "Chicago".

a reply to: xuenchen
I wonder if the $500,000,000 raised test scores at all?

originally posted by: butcherguy
a reply to: xuenchen
I wonder if the $500,000,000 raised test scores at all?

Only for the Bankers.

a reply to: xuenchen

Don't we have a word for that, oh yea, insolvent...

originally posted by: jhn7537
a reply to: xuenchen

Don't we have a word for that, oh yea, insolvent...

The wonderful part is that somewhere in that school system, they are teaching kids how to balance a checkbook.

originally posted by: xuenchen
Big money for the Chicago Public School system that's so far in debt already they can't figure out what else to do.

Not only financial failures, but they have a real efficiency problem as well.

Now they go and borrow $500 Million and agree to pay off over extended time and get zonked for $850 Million in interest alone, not counting the administrative costs either.

WTF ?

In July, Chicago Public Schools borrowed $500 million in long-term, high-interest loans. These loans, taken out at interest rates between 7.25-7.65 percent, will cost the district more than $850 million in interest costs alone for a total cost of $1.35 billion, according to a Chicago Tribune analysis.

I think liberals do not do very well in math...seems their numbers always add up to amounts unsustainable.

And I thought my credit card interest rate was bad.

Probably just a means to launder/clean some serious $$.

a reply to: xuenchen

And even worse than the interest on the loan is, how much of that 500 million will be lost to fraud , waste, and abuse?

My guess, almost half.

originally posted by: Xtrozero
I think liberals do not do very well in math...seems their numbers always add up to amounts unsustainable.

Eventually they run out of other people's money...

originally posted by: annoyedpharmacist
a reply to: xuenchen

And even worse than the interest on the loan is, how much of that 500 million will be lost to fraud , waste, and abuse?

My guess, almost half.

My aren't you the optimist!

a reply to: butcherguy

I don't think they teach common sense things like how to balance a checkbook, read a contract, etc...in public schools anymore, do they???

My mom taught me how to do that by age twelve. I don't recall the subject ever being broached in school at all.

That was the place where Al Capone lived wasn't it? It's known as racketeering.

It's so stupid, I can't articulate coherently on that... man...

And no money left for improvement... It's only a** covering.

Maybe Chicago should go the California way and propose to remove algebra. That should help them.

Also, who is lending the money? I'm not sure I saw it in the article. Anyways, nice financial institution that clearly has education's best "interest" in mind. Assuredly all of it...

originally posted by: Xtrozero

originally posted by: xuenchen
Big money for the Chicago Public School system that's so far in debt already they can't figure out what else to do.

Not only financial failures, but they have a real efficiency problem as well.

Now they go and borrow $500 Million and agree to pay off over extended time and get zonked for $850 Million in interest alone, not counting the administrative costs either.

WTF ?

In July, Chicago Public Schools borrowed $500 million in long-term, high-interest loans. These loans, taken out at interest rates between 7.25-7.65 percent, will cost the district more than $850 million in interest costs alone for a total cost of $1.35 billion, according to a Chicago Tribune analysis.

I think liberals do not do very well in math...seems their numbers always add up to amounts unsustainable.

They are always optimistic about the growth of the local economy in order to justify their spending plans that involve raising taxes. A 10% rise in business rates is justifiable in more school spending, which would provide a better supply of educated workers for businesses.

But by raising taxes, they cheese off the local employers who would otherwise take on new staff with any increase in profts they would gain. But giving tax cuts doesn't guarantee that jobs will be created either.

a reply to: xuenchen

What a horrible idea to lend Chicago this money especially at that rate. Who lent the money? Cause I wanna know who is going to be given assets to sell off once the first check bounces.

a reply to: xuenchen

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford

A damn loan shark would have gave them a better rate

Yikes! That's the kind of usurious interest rate you get from a pawn shop or a payday advance outfit.

originally posted by: stosh64
a reply to: xuenchen

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford

A: Lucky school board gets "free" advice from friendly Rockefeller Foundation.
B: School board needs cash for budget, and borrows millions at way over prime rate, from friendly Rockefeller banks.
C: Citizens robbed blind again, and don't do anything about it other than complain about teachers.
D: Who do you think is really in charge around here?