QZAB Home

 

QZABs
Back

Manual

Qualified Zone Academy Bonds:
A Tool That Works for Schools 

School districts need assistance renovating schools, and the federal role in school construction was improved to help schools meet their needs. Through the establishment of Qualified Zone Academy Bonds (QZABs) school districts with low-income populations can save on interest costs associated with financing school renovations and repairs. School districts in at least 21 states are currently using QZABs, and an additional five states are planning exploring their use.

In addition, these benefits can be used for other types of school renovations, such as paying the interest on loans. QZABs cannot be used for new construction but can be used for the following activities:

  • Renovating and repairing buildings
  • Investing in Equipment and Up to Date Technology
  • Developing Challenging Curricula
  • Training Quality Teachers
QZABs also encourage schools and businesses to cooperate in innovative ways that expand students' learning opportunities and help schools prepare students with the kinds of skills employers, and our nation, need to compete in the global economy. 

Applications Can Be Simple

QZABs give states flexibility to award funds to qualified schools in the way that best meets their goals and needs. As a result, the application process varies from state to state. This process is usually fairly simple; in fact, California's application is only 2 pages. 

Some Examples OF Communities Benefiting from QZABs

Though QZABs have only been in effect since 1998, applications have been approved or submitted in at least 21 states:[1]
 
  • Arizona
  • California
  • Connecticut
  • Florida
  • Illinois
  • Indiana
  • Kansas
  • Missouri
  • Mississippi
  • Nebraska
  • New Mexico
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Tennessee
  • Texas
  • Virginia
  • Washington
  • Wisconsin
In response to the success of the bonds in school districts that have used them, there is growing interest in QZABs. At least five additional states are working on QZAB applications:
 
  • Maryland
  • Montana
  • North Carolina
  • South Dakota
  • Vermont

What People Are Saying About QZABS

  • Ed McLiney, a Kansas City, Missouri investment banker specializing in QZABs, wrote that their 30 most recent clients still can't believe that they have closed loans at 0% interest. (qzabs@mcliney.com)
  • Arthur E. Anderson II, a Richmond, Virginia bond lawyer, wrote that his clients, lower income school districts in two cities and a rural area, were "pleasantly surprised by the flexibility and cost savings afforded by QZABs." The program offers targeted aid to poor school districts with a minimum of federal interference.
1 Sources include The Bond Buyer, State Web pages and Organizations Concerned about Rural Education (OCRE)