An effective debt policy should be firm but not onerous, flexible but not loose. Elements should include the purposes for which debt may or may not be used, the limitations of debt, and the standards for debt issuance. Many municipalities and local governments have adopted formal debt policies, and there are a number of resources available to school districts seeking to prepare their own.26 The input of school bond counsel and financial advisors can also be helpful in this regard.

Following is a list of suggested debt policy elements; most are not original, but are rather derived from current literature, existing policies, and other sources. Some elements are presented to suggest possible remedies to the problems outlined above; others are merely common sense. However, there is no one "model policy," since the needs and circumstances of each school district are unique.

Michigan schools should take an honest, serious look at their past bonding practices and identify any areas that may be improved. An effective debt policy can help. School bonding is an area of public policy where there are opportunities to make significant improvements—improvements that can have real and lasting benefits. Michigan’s schools should seize those opportunities.