A school bond is similar to a promissory note – it is a promise to pay back a certain amount of money that is being borrowed for a specific use, and it will be paid back with interest. There are state and federal laws and regulations on how school districts issue bonds and how the bond proceeds can be used. School districts may issue bonds to pay for construction, acquisition and renovations of school buildings; acquisition of sites for school buildings; purchasing equipment for school buildings and buying buses. School bonds are used as a primary source for school districts to help pay for costly school facilities projects.