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

Educators need a lesson on financial planning. Compounding debt is a solution for anything. It’s the path to becoming Detroit.

Source: 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.

The district plans to use $229 million from the $500 million loan to recoup losses on bonds from previous years”

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