The Indiana Code also provides limited authority to the University to issue external financing in the form of Student Fee Bonds under IC 21-34-6. IC 21-34-6 permits the issuance of bonds for which the sole source of repayment comes from student fees. As a practical funding matter, the Indiana General Assembly provides an annual appropriation referred to as "fee replacement appropriation." This appropriation serves to reimburse, or replace, the University for the student fees that are used to make debt service payments on a substantial portion of the student fee bond portfolio. Bondholders have no lien, attachment or any other legal interest in the fee replacement appropriation, only in student fees. Facilities that are authorized by the Indiana General Assembly to be financed with student fee bonds include but are not limited to, academic and administrative facilities, libraries, laboratories, classrooms, utility infrastructure, and telecommunications infrastructure.
Posted on July 27, 2010