BACKGROUND

USDA Community Facilities Financing and Charter Schools

HISTORY

Since the first charter school law was established, charter schools have grown in number and in size across the country. Even with this growth, finding adequate and affordable facilities, as well as ways to finance those facilities, has continued to be a challenge, especially for rural charter schools.

 

After decades of searching for the best solutions to these challenges, the United States Department of Agriculture (USDA) is one of the largest organizations to provide financing for charter school facilities. It surpasses most banks and even the Department of Education.

 

Through the USDA Rural Development’s Community Facilities Direct Loan and Grant Program and the Guaranteed Loan Program, over 100 rural charter schools have received more than $600 million in financing since 2008.

PROGRAMS & PARTNERSHIPS

The USDA Rural Development’s Community Facilities Direct Loan & Grant Program and their Community Facilities Guaranteed Loan Program provide important sources of facilities financing to rural communities and have proven effective sources of capital for rural charter schools.

 

In 2017, Momentum Strategy & Research (Momentum) worked closely with USDA Community Facilities staff to begin documenting the rural charter school experience with USDA Community Facilities financing. 

In 2019, funding from the Charter School Facility Center at the National Alliance for Public Charter Schools allowed Momentum to further research, compile, and disseminate additional findings of the charter school experience with the USDA financing programs.

In 2020, the Schoolhouse Support Program was developed (thanks to a USDA grant) to provide a centralized location to disseminate the information gathered and to provide technical assistance to the rural charter school community to strengthen USDA Community Facilities charter applicants. 

RESEARCH

The 2019 research expands on preliminary research into USDA / charter school transactions to supply school and transaction data for the variety of parties involved in USDA financing. The final report was released in early 2020.

 

In addition to compiling a transaction and school database, a primary research goal was to reflect input received from various parties experienced in USDA financing, including schools, finance professionals, and USDA officials, working to improve the connection between USDA financing and rural charter school facility needs.

 

While the USDA has been financing charter schools since before 2008, the report summarizes the period between 2008 and 2018 and profiles the 98 schools and accompanying transactions financed over that period, highlighting key findings and providing recommendations to strengthen the effectiveness of USDA’s charter school financing.

View the USDA Financing of Rural Charter Schools Report to learn more about

the USDA financing of rural charter schools.