California Community Colleges Borrow Against Tomorrow
It’s no secret that California budget shortfalls have caused havoc in that state’s once-robust university system. Classes have been cancelled, faculties cut, building programs scrapped – and worse.
Those problems have not been limited to the big California state schools. They have also affected community colleges. And for students who lack the time or funds to go to a regular state school, that spells big problems.
To keep their doors open, a number of California community colleges have been selling bonds. Now, selling bonds has always been an effective way to finance activities that benefit the public – projects like bridges and roads. But according to a recent article in California Watch, “Several California community college districts have sold bonds that allow them to put off payments for up to 40 years, causing the total repayment to cost taxpayers from five to nine times the principal.”
Here are some examples from the California Watch article . . .
- Chabot-Las Positas Community College District will pay $850 million by 2046 on $169 million in bonds. That’s five times the principal.
- San Bernardino Community College District will pay $493 million by 2048 on $56 million in bonds. Again, that’s five times the principal.
- Victor Valley Community College District will pay $271 million by 2049 on $34 million in bonds. That’s eight times the principal.
And there’s still more news from California’s cash-strapped colleges. According to another article, this on in The Chronicle of Higher Education, Las Positas College in LaJolla is trying to convince local businesses to sponsor individual college courses. That’s actually a pretty brilliant idea. A local business would contribute $5,000 to sponsor a course and be listed as the sponsor.
The concept is similar to sponsoring a park cleanup, a stretch of highway, or a little league team. Well, why not? Maybe it is an idea whose time has come.
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