The legislature intended tax exempt financing to be available efficiently and economically but without any cost to the state or its taxpayers. The Authority issues revenue bonds to assist Minnesota colleges and universities. Since it was created in 1971, over $2 billion have been issued for capital projects and refinancings.
The borrowers are generally private nonprofit educational institutions authorized to provide education beyond high school. Eligible projects include facilities for housing, academic and administrative purposes, parking, student centers and other buildings and equipment to be used for instruction, research, or operations.
Public colleges in the State are also eligible but are limited to child-care and parking facilities or special projects authorized by special legislation.
As of June 30, 2015 the Authority has issued 205 bond series (including some that have been paid in full or in part). As of that date, approximately $852 million is outstanding. The Authority is limited to a total outstanding principal amount of $1.3 billion.
Bonds issued by the Authority are payable only from the loan repayments and other security pledged by the college or university borrower benefiting from that bond issue. None of the Authority’s bonds are a debt or pledge of the faith or credit or moral obligation of the State of Minnesota. The Authority does not receive state appropriations or tax revenue and relies on borrower fees to pay for its operations.