Schools Take Out Loans for State Payment Gap

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The state of Michigan says it pays per pupil funding beginning in October for an 11-month period. Educators say that beginning the next school year, they work about six to seven weeks before districts receive a state check. Because of this, some schools are opting to take out loans to bridge the early funding gap.

Both Holt and Williamston are reportedly doing just that. For Holt, it could be the third consecutive year of early year state loans. Williamston voted to borrow about $2.6 million. These loans are very low interest and are paid back within one year.

State officials say many districts over the past six years have taken part in this activity.