4 Reasons Why You Need a Private School Bond

There were almost 35,000 private schools in America as of 2016, serving millions of students from the elementary to college levels. Many if not all of these schools were required to obtain a private school surety bond before they were legally allowed to serve students. Twenty states require private schools to be bonded as part of the licensure process, but whether that requirement applies to a specific school depends on how many students it serves and how the school is organized.


Surety bonds are a form of protection for students and their families in case the private school does not fulfill its contractual obligations. For instance, students typically pay upfront for an entire semester of school. If the school closes after two months, the school has failed to deliver the amount of education that was previously agreed upon. Requiring the school to have a surety bond ensures that students can recoup some or all of the lost tuition costs.


Whether a private school is granted a bond depends on the financial fitness of the applicant. As part of the application process, they must submit to a credit check, detail their business experience, show evidence of sound financial standing, and report the number of students and total tuition received or expected. The bonding company will determine whether the applicant is an acceptable financial risk. Afterwards, the surety will issue a bond. The bond amount set by the state is usually based on the expected amount of tuition to be collected by the school or amounts collected in prior timeframes. That way, if the school fails for any reason, the bond may be called upon to help reimburse the students.


The amount of a private school bond can be significant depending on the size of the school. However, the amount the school actually pays is a small fraction of the total (typically 1%-3%). Bond premiums must be paid annually or else the bond expires and the school’s license is at risk of being revoked.

Here are four examples of why private schools should carry a bond.

To Gain a State License

In states where private schools are required to carry a private school surety bond, it’s illegal to offer any form of instruction without first meeting this requirement. Without a bond, schools either can’t operate or face penalties from the state if they do. Applying for a bond is a standard part of the business plan at most private schools. Since so much depends on having the bond, it’s important to start the application process as early as possible. Ultimately, whether or not the school is able to obtain the required surety bond dictates if it will be a viable business.

To Promote Good Governance

Tuition costs are not the only thing bonds cover at private schools. If the school is found to be in violation of any applicable laws, the bond can also be drawn on, and the school is ultimately liable for paying the bill. No business wants to pay unnecessary costs, so there is a powerful incentive to run the school compliantly. Having a bond is just one aspect of the good governance that all private schools need to ensure they’re serving students, complying with regulators, and practicing fiscal responsibility all at the same time.

To Build Trust With Students

Private school tuition is an expensive investment in something considered vital for personal development. Therefore, students and parents want to feel completely confident they’re investing in a reputable institution. Carrying a private school bond indicates that a school values the investment made by students and parents, and is committed to protecting that investment. Given the choice to attend a school with or without a bond, many will choose the bonded school because of the financial security it offers.

To Take Responsibility

Private school surety bonds may be legally required, and may even be solid marketing tools, but at a fundamental level they are a responsibility for any institution that takes up the important work of education. When schools accept tuition money, they make a tacit promise to deliver a service, which is no different than when a general contractor takes an upfront payment. Not every enterprise considers it their responsibility to reimburse customers for services not rendered, but the ones that thrive over the long-term typically do. Bonds hold institutions accountable, which creates natural incentive for those institutions to excel.

Apply for a Private School Bond Anytime

Viking Bond Service has two decades of experience working with private schools and businesses of all types. Our team is committed to providing you with quality information and exceptional bond options that meet any applicable state requirements.

The first step is to request a free bond quote. Please contact us at 1-888-278-7389 or take a few minutes to fill out our online application.