In September 2023, the U.S. Department of Education awarded PCSD a significant $20 million in credit enhancement funds. This grant is more than just a financial boost; it’s a strategic tool that helps us expand educational opportunities for students in under-resourced communities by making facility financing more accessible to charter schools.

Why Credit Enhancement Matters

Credit enhancement is essential in the charter school facilities sector, where access to traditional financing can be a significant barrier. Many lenders hesitate to offer loans to charter schools due to perceived risks and the unique nature of these institutions. By providing a debt service reserve—essentially a safety net that ensures a portion of the loan payments is covered—credit enhancement lowers the risk for lenders and makes them more willing to invest in these transformative projects.

Supporting Our Partners

We’ve already put these funds to work, directly supporting several of our key partners:

1. RYSS STEM Academy Pasadena (TX): We provided debt service reserve for the Raul Yzaguirre Schools for Success (RYSS) STEM Academy Pasadena facility project. This support was crucial as it reduced the financial risk for the lender in a complex financing structure for a brand new school who might otherwise be unwilling to fund such a critical educational space.
2. CWC West Valley (CA): In Los Angeles, we extended debt service reserve to support the financing and development of CWC West Valley. The lender was already supporting other CWC schools and reaching the edge of its concentration limits, and PCSD’s pledge of credit enhancement was critical in providing a level of assurance to get the loan closed. The affordable financing sourced by PCSD not only facilitates smoother financial operations but also helps the school focus on its mission to deliver high-quality education without the constant worry of financial constraints.
3. UP Excellence (TX): We provided debt service reserve for UP Excellence, a newly authorized charter school in Houston that welcomed its first cohort of students this Fall. Without a track record of enrollment and academic outcomes to measure, new start-ups are especially challenged in acquiring financing. PCSD’s pledge of credit enhancement provided the assurance needed for the lender to close financing so that improvements could be completed in time for the new school year, ensuring the school had a welcoming space for its inaugural students and the stability needed to establish itself and thrive in its early years.

Making a Difference

Our credit enhancement program plays a pivotal role in bringing high-quality educational facilities to life. By mitigating financial risk for lenders, we unlock doors that were previously closed, allowing more students to learn in environments designed to support their success.

This $20 million award is a testament to the trust and confidence placed in PCSD’s ability to create lasting change. We’re excited to continue leveraging these funds to support our partners and, ultimately, to build a more equitable educational landscape for all.

For more information on the award and how we’re using it to support our partners, read more here.

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