Chicago Sun-Times
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Without state funding, borrowing is best of bad options for colleges

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We're not thrilled about Illinois universities having to take out short-term loans to cover expenses while they wait for the hundreds of millions of dollars owed to them by the state.

But we've run out of other options.

Public universities in Illinois have come dangerously close to the point where furloughs, hiring freezes and other cost-cutting measures are no longer sufficient to make up for the lack of state funding.

So we're pleased that Gov. Quinn today signed a bill allowing universities to borrow against what they're owed by the state.

The downside is that the money would have to be repaid within a year, with interest.

But at least it gives colleges the ability to keep their bills paid until the delinquent state funds are finally paid out.

In a related story, a Georgia-based company is offering Illinois vendors the opportunity to sell their debt to a third party in exchange for most of the money they're owed by the state.

We can't fault the company, Alpharetta Industries, for taking advantage of the state's miserable finances. And we understand why struggling agencies might be inclined to take the offer, even though it will cost them at least 8 percent of what the state owes them, according to the Associated Press.

But like the college borrowing bill, it's a sign of how dismal the state's budget crisis has gotten, so much so that agencies providing valuable services are being forced to consider taking out payday loans just to make ends meet.

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This page contains a single entry by Monifa Thomas published on June 8, 2010 3:26 PM.

Mixing rain and oil: Green group's Loop protest vs. amendment was the previous entry in this blog.

Readers are losers in Illinois' budget crunch is the next entry in this blog.

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