Welcome, I also am not an experienced skoolie, however I have read a lot, and will pass on the information I have gleaned as well as a few tips.
1. If you see rust that concerns you on the frame rails underneath, you can probably bet the floor will be rusted worse. This means more money/time spent to repair.
2. The 5.9 Cummins 12v is one of the smaller engines put into a school bus. It has a large following and plenty of parts availability due to it also being put in light trucks. It is an all mechanical engine, which means easy to work on and improve the power (at the cost of reliability) It is not a sleeved engine as it's big brother the 8.3, which means any real engine work and it has to be pulled from the bus.
3. This bus most likely has an AT545 transmission. This is the least desirable transmission, but also the most common for the era. It does not have a lock up torque converter which means there is always slip and therefor always heat. Not desirable if you plan on climbing mountains. An MT643 could most likely be swapped in if wanted/needed.
4. The age of the bus means you don't have to deal with emissions, or electronics. That's good. It does not have the P-Pump which is the most desired mechanical fuel pump, instead has the VE44 rotary pump. This is still adjustable for a cheap power increase.
5. IMHO the price is way too high, UNLESS;
a) it truly only does have 36,000 miles. (I suspect this number because of the age. 36000mi/26yrs = 1385 mi per year...)
b) the rust you saw is only surface rust and can be cleaned off with no/minor pitting.
c) the engine runs w/o ANY problems. If the 36,000 mi is correct it should purr like a kitten. Ask for maintenance records, at 36,000 mi there shouldn't be to many of them, most school districts do maintenance every 3000 mi. So if you figure, 12 of those, and maybe one every year?
d) all other systems are in great shape. Brakes, P/S, A/C, tires (check for cracking and date codes).
d) this is the perfect bus for you. Is it the size, style (front engine), have the options (A/C, Air ride, brakes, etc...) that you are looking for? If not, there is no way, I'd pay twice what I could get it for at auction.
If I were you, I'd pass. I'm assuming you're in the Kansas area, If you are looking for a bus, I'd check the well known auction sites like govdeals, and publicsurplus for buses close to you, but also www.purplewave.com
which is a Kansas area auction site. If you're willing to travel a bit there are other regional auction sites which might not have the quantity of buses as the national sites, but might have what you want within a reasonable driving distance. renebates.com auctions in the Texas area, and I'm sure there are others, I just haven't found them all yet.