Chicago schools to pay $70K a day in interest on 2 big loans

CHICAGO (AP) - The nation's third-largest school district has borrowed another massive amount of money at a high interest rate in order to help start the new school year.

Chicago Public Schools borrowed $112 million Monday at 6.41 percent interest. The Chicago Sun-Times reports the rate is approximately four times what a government with better credit ratings would pay. The sum comes days after the district borrowed $375 million at a similar rate.

The Chicago Tribune estimates it'll cost CPS roughly $70,000 daily in interest for both deals.

The loans are expected to be repaid with education grants which have been delayed because of the state budget impasse. The district faces a December deadline to repay or refinance the loans.

The cash-strapped district has made cutbacks. Credit rating agencies have placed the district at "junk" status.