MASA eLeader

The federal government devised Qualified Zone Academy Bonds — known by their acronym QZAB — as a way to help schools with low-income students accomplish improvement projects. Lenders buy the bonds, offering zero percent interest in return for federal tax breaks.

But local school districts trying to sell the bonds are finding lenders aren't interested because they don't need the tax breaks, often because they aren't making enough of a profit to benefit from them.

Schools either aren't able to find any lender interested in buying the bonds, or they're finding lenders are charging interest rates as high as 3 percent.

In Shelby, Superintendent Dana McGrew said the district has been trying to sell $1.1 million in QZAB bonds for a couple months, and there have been no takers.

"I was cautioned when ours went up for sale," McGrew said. "The attorney we're working with told us there was a school in the Upper Peninsula that did not get a single bid."

In Holton, administrators are keeping their fingers crossed they'll get buyers for $1.7 million in QZAB bonds they're trying to sell, though they're no longer counting on zero percent interest. The district waited longer than it initially expected — six months — to get state approval to participate in the QZAB program. And by the time it got approval in mid-June, the district needed to be on a fast track to get work done before school starts in September.