Great Lakes Wire

State school districts have saved approximately $8 million in interest after the School Loan Revolving Fund (SLRF) interest rate was dropped to 1.19%. 

The news was announced by the Michigan Department of Treasury after Gov. Gretchen Whitmer signed Senate Bill 618, which altered the SLRF interest rate.

"Every student, in every district, has a birthright to a phenomenal public education so they can pursue their potential," Whitmer said in a recent Michigan Department of Treasury press release. "With these cost savings, we will have even more resources to invest where they matter most—in our students, teachers and classrooms. I am proud of the work the Michigan Legislature and I have done to close the funding gap between districts and increase per-pupil funding to its highest amount ever. As we look ahead, we have a huge opportunity to continue providing savings for school infrastructure, providing our students safe, well-equipped facilities for learning. We want parents to know that their kids are safe, supported and successful, and I will work with anyone to continue making historic investments in education so we can help every kid thrive."

The School Bond Qualification and Loan Program provides a credit boost and loan vehicle for school district bond issues. The bonds must be approved by the state treasurer, and bond proceeds must be used for capital expenditures, the release said.

The state's credit rating backs the school districts, which allows the program to offer lower interest rates and costs, the release said. In order to receive funds from the SLRF, a school district must impose at least "seven debt mills" and execute a repayment agreement with the state.

"This fund is an important tool for school districts," State Treasurer Rachael Eubanks said. "Lowering the interest rate means local communities can realize taxpayer savings, or they can direct more property-tax dollars to building and improving school facilities rather than paying interest to the State."