Steeped in Debt
According to a report at Bloomberg Business Week, Detroit Public Schools currently face $327 million in debt with no visible means of repayment at this time. While bankruptcy is a viable option for Detroit, the district's debt insurer, Assured Guaranty Ltd., wants the state legislature to add a no-bankruptcy agreement before the schools can take out any more short-term debt. Without the agreement, the insurer has threatened to accelerate long-term debt payments, raising the annual payment amount from $21 million to $45 million. The schools, which cannot afford this option, have been forced to look at other solutions to their financial crisis as a result.