North Carolina Proprietary School Bond
A quick guide to one of the most important requirements for proprietary schools!
What is a Proprietary School Bond?
In order to protect the students or enrollees from the following events, every proprietary school who is seeking a license must submit a surety bond to the North Carolina State Board of Community Colleges:
- The revocation, suspension, or nonrenewal of the proprietary school’s license
- If the proprietary school goes into bankrupt
- If the proprietary school ceases operation
If any of the aforementioned events occurs, the Obligee of the surety bond will be eligible to retrieve a sufficient amount from the surety bond by filing a claim. This is to compensate the person/s who has suffered damages or losses.
What is the Proprietary School Bond amount?
The bond amount will vary per licensee. This will be determined by the North Carolina State Board of Community Colleges.
Initial License – the minimum bond amount is $25,000
First Four License Renewals – the bond amount should be equal to the greatest amount of unearned paid tuition held by the school during the previous fiscal year.
Proprietary schools operating for more than 5 years
- Student Protection Fund (SPF) balance is below the catastrophic loss amount ($1,000,000) – the bond amount should be equal to the maximum amount of prepaid tuition in the school’s possession during the previous fiscal year multiplied by the percentage amount the SPF is deficient.
- The prepaid tuition is more than the SPF’s catastrophic loss amount – the bond amount should be the difference between the prepaid tuition amount in the previous fiscal year and the SPF’s catastrophic loss amount. This will be an addition to any other bond amount required by the NCSBCC.
If you have determined your bond amount, you may check you bond premium by getting your FREE QUOTE HERE from us!
How can I get a Proprietary School Bond?
SEND US A BOND APPLICATION– We begin the bonding process with an application. You may send your application for this bond HERE!
UNDERWRITING– Once we have received your application, an underwriter will ask you to submit the following important requirements:
- Proof of your financial capability
- Your business’ history
- Your credit score
In order to avoid any delay, make sure that your requirements are complete prior to submitting them.
ISSUANCE– As soon as the underwriter has completed the necessary in-depth check, we will immediately issue the surety bond and send it to you!
What are the surety bond conditions?
- The Surety should be North Carolina-recognized
- The Obligee will be the North Carolina State Board of Community Colleges
- The licensed proprietary school must obey the provisions of Chapter 115D Article 8 of the North Carolina General Statutes as well as the rules and regulations of the North Carolina State Board of Community Colleges
- If the licensee ceases operation, goes into bankruptcy, or has lost its license, the Obligee will be eligible to file a claim against the surety bond