An instructional school bond is a type of surety bond. Many states require schools to acquire these bonds to ensure their academic institutions faithfully fulfill contracts and agreements.

Colleges and private schools often handle large financial transactions and are required to abide by strict regulations. If you’re a dean, private school board member, another college leader, or on your state’s Board of Regents, you may have heard of this type of bond. It’s vital to understand its importance – both for your institution and your students. It may offer the protection needed if the unexpected happens.

How do instructional school bonds work?

Also known as private school bonds, instructional school bonds can help protect students and states from schools that violate laws or regulations. If a school breaks the bond contract in any way, someone can make a claim on the bond.

For example, let’s say you’re a college leader, and you learn that the school you work for mishandled a student’s financial aid. The student could file a claim on your school’s bond. If the court upholds the claim, the bond may compensate the student for their losses – up the bond’s value.

Like other types of surety bonds, a private school bond is a contract between three different parties:

  • Surety: The party that issues the bond to the principal
  • Principal: The person or company responsible for fulfilling the obligations listed in the contract
  • Obligee: The party requiring the principal to obtain a surety bond

Instructional school bonds are payable to each school’s respective state as a form of financial responsibility. To maintain compliance, bonds must be renewed every year or two.

Who is required to put up an instructional school bond?

States typically only require privately held institutions and instructional schools to obtain this type of bond. Here are some common examples of institutions that must become licensed and authorized before enrolling students.

  • Colleges
  • Universities
  • Schools of religious study
  • Non-degree granting vocational schools
  • Driver educational schools
  • Barbering and cosmetology schools
  • Graduate schools such as medical, physical therapy, and chiropractic schools
  • Real estate and appraisal educators

What is the required bond amount, and how much will it cost?

That depends. Required bond amounts vary by state. However, the cost is typically 1% of the total bond amount. For example, the State of Iowa may require a bond amount of $50,000, so the premium for the bond would be $500.

Oregon calculates the bond amount quite differently. The bond penalty would be equal to or less than the annual rolling average of prepaid tuition held by the school.

Since requirements vary by state, we encourage you to talk to the obligee involved in the case. Also speak with your surety representative to ensure you’re providing a bond for the correct amount.

Which states require instructional school bonds?

Almost every state requires some form of this bond. The main difference between states is the scope of education necessary to put up the bond. For instance, Ohio only mandates this type of bond for cosmetology, barber, and driving schools.

How to Obtain an Instructional School Bond is a leading surety agency providing bonds in all 48 mainland states. You can email us at to acquire this bond quickly. Getting a quote is free and easy. A surety bond representative can answer any questions you have about the bond type or process.

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