Home / FEATURED ARTICLES / Insanity: Chicago Public Schools Pay $850M in Interest on $500M Loan

Insanity: Chicago Public Schools Pay $850M in Interest on $500M Loan

General Michael Flynn defense fund Fellow patriots, please listen to this short, inspiring message from General Flynn. General Michael Flynn exemplifies patriotism, courage, and love of God and country - despite some of his own countrymen relentlessly attacking him. Donations for his defense are greatly appreciated. If you can only give $5.00, please do so - every little bit helps. Thank you so much, and God bless. Letter from General Flynn. 


The state of Illinois is broke (has the state passed a budget yet?), and the dysfunctional city of Chicago is a big reason why.

This is how unsustainable and plain insane Chicago is — the city’s public schools system will pay more in interest ($850 million) than the amount of the loan ($500 million).

Robert Brutvan reports for Illinois Policy, August 1, 2017, that in July of this year, the insolvent Chicago Public Schools (CPS) borrowed $500 million in long-term, high-interest loans.

According to an analysis by the Chicago Tribune, the loans carry interest rates of 7.25% to 7.65%. CPS will pay off the loans over 25 years, at roughly $35 million a year in interest.

That means that by the time the loans are paid off in 2042, the Chicago school district will have paid more than $850 million in interest on the original $500 million loans — making the total cost of CPS’s loan repayment a staggering $1.35 billion. By 2042, students entering kindergarten this fall will be in their mid-30s.

The $500 million long-term loans came shortly after the district borrowed $387 million in short-term loans from JPMorgan to cover a pension payment. Those short-term loans generated nearly $70,000 in interest a day over the summer.

The district plans to use $229 million from the $500 million loans to recoup losses on bonds from previous years. The district will also reimburse itself $31 million in capital expenses from past years. This tactic of using new loans to pay off old debts is known as “scoop and toss,” a method of covering deficits from years of financial recklessness.

The state’s lawmakers are attempting to bail out CPS as part of Illinois’ new education funding plan. But if CPS is unable to secure funding from the state to pay off the loan, the district already has stated it plans to look to property taxes to pay off its ever-mounting debts.

Despite having taken out a total of $887 million in loans over the last two months, CPS students and parents may not notice any large improvements in the classroom come fall, as CPS has used its dependency on short-term borrowing to make payments on pension debt rather than using the money to fund classrooms.

You Might Like

H/t FOTM‘s stlonginus

~Eowyn

Republished with permission Fellowship of the Minds

Please Spread the Word and Share This Post

You Might Like

Viewpoints expressed herein are of the article’s author(s), or of the person(s) or organization(s) quoted or linked therein, and do not necessarily represent those of True Conservative Pundit

TCP News is an Amazon affiliate, by clicking certain links contained within posts, TCP may or may not earn a commission.

Another way you can support us is to purchase my book.

Subscribe to my daily newsletter, and join hundreds of daily readers and receive news and relevant commentary

Don't forget to follow True Conservative Pundit on Facebook, Gab, SpreelyUSA Life, and Twitter

If you value what you see on True Conservative Pundit, please consider donating, any amount helps

donate to TCP News

About Guest Author

One comment

  1. Insanity!!!! We need someone to step in and fire those in charge who are enriching the banksters.Go public with the information,call out those in charge at the bank and tell them they are destroying the school systems.Tell them if they don’t renegotiate the terms of the loan,no further payments will be made.Start over,fire anyone who has been involved with any type of corruption and start doing this across the country.

Leave a comment - or not. We have NO tolerance for trolls, abusive and inflammatory comments, or those laced with profanity. No more than two links. Keep it clean and on point, or be banned.