School Bond
A school bond is a form of insurance purchased by a private school that guarantees students and parents will receive at least a portion of their tuition money back if the school closes before the end of the school year.
School surety bonds are typically required for any private educational institution that collects prepaid tuition.
The primary purpose of the school bond is to financially protect students and their families if the school fails to deliver the promised educational services or shuts down unexpectedly. States like California and Florida require these bonds based on the amount of prepaid tuition the school holds.
Key Highlights
- Also referred to as a tuition bond, a school bond is typically required by the state.
- This bond protects parents and students in the unlikely event of a closure, while also providing additional assurances to prospective students and parents who may question the school's financial situation.
- Private schools generally charge tuition upfront, which puts families in a significant financial investment in their children’s education. School bonds help to protect that investment.
How do I purchase a school bond?
NFP, the nation's largest and most reliable surety company, is authorized to issue school bonds in each of the 50 states. We can provide the best rates for your bond, as well as the fastest issuance, to get your business off and running.
Our short online application makes it easy. Click below to start the application process today.
School Bond FAQs
A school bond is a form of insurance purchased by a private school that guarantees students and parents will receive at least a portion of their tuition money back if the school closes before the end of the school year. Also referred to as a tuition bond, a school bond is typically required by the state. This bond protects parents and students in the unlikely event of a closure, while also providing additional assurances to prospective students and parents who may question the school's financial situation.
School surety bonds are typically required for any private educational institution that collects prepaid tuition, especially in states where such bonds are mandated as part of the licensing process. This includes:
- Private elementary and secondary schools
- Vocational and technical schools
- Cosmetology and beauty schools
- Driving schools
- Private postsecondary institutions
The primary purpose of the bond is to financially protect students and their families in the event that the school fails to deliver the promised educational services or shuts down unexpectedly. States like California and Florida require these bonds based on the amount of prepaid tuition the school holds.
If a school closes or doesn’t meet contractual requirements, families file claims to recover tuition costs that they’ve already paid. The surety company will cover the claim cost initially, and then the school reimburses the surety company after.
The cost of a private school surety bond typically ranges from 1% to 10% of the total bond amount per year depending on credit and financial stability.
Both private schools and families benefit from private school bonds; they offer credibility to the private institution and provide a safeguard for families and students.
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