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Issued a No Set-Aside MFA Borrowing Last Year But Not this Year? Read This!
The overabundance of ESSER funding has allowed many schools to substantially reduce, or even eliminate, their need for summer cash flow borrowings. For schools that issue a “no set-aside” note through the Michigan Finance Authority (MFA), meaning that at least a portion of the note matures in August, the MFA typically deducts the balance due on the prior year’s no set-aside note from current year’s borrowing and, if necessary, the August state aid payment.
But how will a 2020 no set-aside note be repaid if a school is not borrowing through the MFA in 2021 and the August state aid payment will not cover the balance? Because of reduced borrowing needs, several clients are in this position. The MFA indicates that it will send instructions to affected schools around August 10 showing the remaining balance owed on the 2020 note with payment instructions. The balance will be due August 18, a few days before the 2021 note pool closes on August 20. Accordingly, affected schools will need to act promptly to timely remit payment to the MFA.
If you have any questions about the MFA state aid program, please contact a Thrun Law Firm finance attorney.