Certain private schools in Alabama, such as vocational, technical, and proprietary schools are required to obtain a license and a Private School Performance Bond in order to offer their education program. The Alabama Community College System (ACCS) uses the bond as a financial stability tool, provided by Jet Insurance Company, as a guarantee that students are compensated if a school does not refund the students following a failure to provide the agreed-upon education.
Jet provides this bond directly to its customers with no middlemen agents or brokers, therefore ensuring the original bond filing and subsequent bond renewals to the ACCS occur without hassle and risk to your licensing.
Simply put, private schools offering a degree need a $50,000 bond limit, and schools not offering a degree need a $20,000 bond limit.
For the $50,000 Private School Bond (degree granting), the lowest rate for the bond is $50 monthly or $500 annually. For the $20,000 Private School Bond (non-degree granting), the lowest rate is $20 monthly or $200 annually. Rates are based on the financial status of the school’s ownership. Below is a chart of Jet’s preferred tier bond rates.
|Bond Limit||Monthly||1 Year||2 Years|
The school’s license is renewed every two-years, so a two-year bond term to coincide with the licensing may be preferred. With Jet, you can also take advantage of our monthly rate which gives our customers the freedom to set up payment and never worry about the bond again until they want to cancel.
The Private School Performance Bond is enforced by the Alabama Community College System as a part of licensing to protect students from fiscal losses stemming from a breach of contract or not providing the education that was paid for. The bond purchased by you brings Jet into a financial role to guarantee payment to students who are not refunded appropriately by you or as deemed necessary by the ACCS following a complaint.
The Alabama State Legislature, recognizing the importance of the education system, uses the bond as a tool to provide financial stability and legitimacy for the various private schools that exist for education of Alabama citizens. Should a school misrepresent themselves or unfortunately go out of business, a student should be able to receive a refund. If the school is unwilling or unable to refund the student, it would bring financial damage to the students and create mistrust in the Alabama educational system. Consequently a headache for the ACCS and the Department of Education of Ferris Bueller proportions.
You can apply online by clicking the button above or by calling us at (855) 296-2663. Online we gather some basic information and one of our underwriters will get back to you if any additional information is needed. We do gather a social security number from the owner as rates do factor in regarding their personal credit, but don’t worry as it is just a soft check and will not affect the credit score.
Once we have established the rate, you will receive an email with our quote and a link to purchase the bond online. Following the purchase, you will receive a copy of the bond and receipt.
Jet will file the bond for you to the ACCS with no fees or the hassle of shipping a piece of paper all over the place.
During your application to become a licensed school, should you want to submit the original bond form with other paperwork, you may. Simply request that Jet send you the original and we will.
The bond form is filed to the following location:
Alabama Community College System
PO Box 302130
Montgomery, AL 36130-2130
The bond has an expiration date on it based on the term that you purchased, unless you buy the monthly option with Jet. In that case, Jet will keep your bond active until you actively cancel the bond or if a monthly payment doesn’t come through from the card provided.
If you purchase a bond on annual terms, you will have to renew the bond. With Jet, you will simply need to provide payment in advance of the bond’s expiration date. Jet will send plenty of notices well prior to the expiration date, so there will be no issue in keeping the bond active with the ACCS.
The bond does have a 30-day cancellation period with the ACCS. This means the bond stays active even after Jet files for cancellation. With that 30-day period taken into account, Jet will send a prorated refund back to you for any time remaining on the bond.
Offer the curriculum you are advertising to your students and there will most likely never be an issue regarding a bond claim. If a Private School can foresee itself as unable to operate any longer, a contingent plan to refund students is a must.
Title 16 Chapter 46 Section 16-46-1 to 10 of the Alabama Legislative Code details all the laws surrounding private schools. When it comes to harming students in a way that demands a refund, schools should maintain quality programs and curriculum, sufficient financial stability, adequate staffing and facilities, and not promise employment as a result of the education (unless you are somehow hiring the graduate).
If a student rightfully demands a refund, then the private school should send back the prepaid tuition. Any misrepresentation or fraudulent behavior on the part of the school can bring an investigation from the ACCS. They will review the curriculum, facilities, materials, records and financial status. Any discovered violation can result in fines and even imprisonment.
If mitigation is offered as a solution to damages, it is always in the best interest of the private school (if they want to remain licensed and operational) to abide by the demands of the ACCS. Failure to do so can be problematic and can lead to a bond claim to recover financial damages sustained by the students.
If you are a private school reading this section that has a bond claim and wants to stay in the game, good. That’s half the battle that you are interested in staying in operation. Send Jet the details of the bond claim and we will mount a defense to the claim. Take note, should the bond claim have followed an exhaustive ACCS investigation and mitigation process, there may be little Jet can do aside from a defense against a clear case of malfeasance.
If the bond claims if valid, Jet will make payment to the affected party(ies) up to the limit of the bond. This does not leave the private school off the hook. The surety bond is like an extension of credit or as the State of Alabama views it, a form of financial stability thus guaranteeing payment, but not transferring guilt. The private school is ultimately responsible for their actions (or lack of action refunding students) and must repay Jet.
Do you have any agents promoting your enrollment to your school? Then those agents would be in need or permitting with the ACCS and along with that a $2,500 Private School Agent Bond.