What is the main advantage of using serial bonds for schools?

The main advantage of using serial bonds for schools lies in their structure, which allows for reduced total interest costs over time. Serial bonds are issued in a series with varying maturity dates, meaning that the school will pay off portions of the principal at different intervals rather than all at once. This staggered approach can help manage debt service more effectively, as the principal is gradually reduced and consequently leads to lower interest payments over time.

As the bonds mature and the school pays off portions of the principal, the outstanding debt decreases, which also reduces the amount of interest charged on the remaining balance. This can be particularly advantageous for school districts that want to minimize long-term financial obligations and ensure a more manageable repayment schedule.

While other options may have their merits, such as the availability of funds or supporting specific programs like extracurricular activities, these do not directly address the primary financial advantage that serial bonds provide, which is the reduction of overall interest costs associated with the debt.