Whenever the State Department of Education shall determine that any school district is in need of capital improvements to an extent in excess of that which may be financed by the credit then due such school district by the department, the department shall be empowered to advance or lend said school district such sums as in the opinion of the department are necessary to be expended for capital improvements by said school district. Such loans or advances shall be evidenced by appropriate agreements, and shall be repayable in principal by the school district from the annual grants to which the school district shall become entitled and from such other funds as may be available. Such loans or advances shall not constitute a debt of the school district within the meaning of any provision or limitation of the Constitution or statutes of the State of Mississippi. The department shall not advance or lend to any school district any sum in excess of seventy-five percent (75%) of the estimated sum which will accrue to the said school district on account of grants to be made to the said school district within the twenty (20) years next following the date of the loan or advance. In determining the maximum allowable advance or loan, the department shall assume that the average daily attendance in the schools of the school district for the past preceding scholastic year as confirmed by the audit of average daily attendance made by the State Department of Audit will continue for the period during which the loan is to be repaid.