North Carolina Proprietary School Bond

North Carolina Proprietary School Bond

Any proprietary business, trade, technical, or correspondence school wishing to provide post-secondary education or instruction in North Carolina must first be licensed by the State Board of Community Colleges (SBCC). The SBCC requires schools to secure a surety bond, known as the Proprietary School Bond, as a step in the license application process. The bond is enforced to ensure that tuition paid by students or their sponsors will be handled responsibly and solely for the benefit of the student. The bond acts as a guarantee of reimbursement if a student or sponsor suffers financial loss as a result of a schools’ poor business practices. 


If you are looking to apply for or renew a proprietary school license, let Jet help you secure the necessary surety bond within minutes. We even take care of filing the bond for you!

How Much Does the Proprietary School Bond Cost?

The price you pay for the Proprietary School Bond will be based on the bond limit required by the SBCC and a soft credit check. Jet’s lowest rate for the Proprietary School Bond is $225 annually or $23 monthly.

Choosing Jet as your surety bond provider gives you the option to pay for the Proprietary School Bond either monthly or in 1-, 2-, or 3-year terms. No matter which payment option you choose, Jet provides competitive pricing and does not charge you broker or commission fees, unlike other surety companies.

Proprietary School Bond Limits:

The bond limit is determined by the SBCC based on the school's annual average of prepaid student tuition; The SBCC has three license categories which are defined below.

Initial Proprietary License Applicants: For new schools that are in the application process for the initial proprietary license:

Renewal Proprietary Licenses Applicants: For schools that have been licensed for one-year, but less than six years: 

Operational Renewal Licensures: For schools that have been licensed and in operation for more than five years:

Audited financial statements or other required supporting documents must be sent to the SBCC to verify bond limits, regardless of the school’s status. Further information about bond limits and required forms can be found on the Proprietary School’s webpage

What Is the Proprietary School Bond Filing Process?

Jet takes care of the bond filing process for you! An original signed and sealed bond must be filed with the State Board of Community Colleges. A copy of the bond will also be sent to you for your records.

A Proprietary School Bond must remain active and on file with the SBCC for the entirety of the school’s operations. The SBCC also asks that a copy of your bond is displayed for public viewing in the business office of the school as well as in the institution's catalog setting forth the school's refund policies. 

If you are applying for a first-time license you will mail in the initial license application, and if you are renewing a license you will mail in the renewal license application. If you prefer to send the bond in with other paperwork, the application process allows you to select that option.

All paperwork should be sent to the SBCC at the following mailing address:

State Board of Community Colleges
5001 Mail Service Center
Raleigh, NC 27699-5001

What Is the Purpose of the Proprietary School Bond?

Proprietary schools are for-profit institutions which provide post-secondary education and training. The State Board of Community Colleges, acting by and through the State Board of Proprietary Schools, has the purpose of assuring students that all North Carolina proprietary schools meet quality license standards in their operation and are financially responsible when handling students’ tuition. To ensure this, the SBCC requires proprietary institutions to acquire the Proprietary School Bond. The bond guarantees reimbursement to students, their parent(s) of guardian(s), or the loan agency in which tuition was financed through, that were financially harmed by the school.

How Do Schools Avoid Proprietary School Bond Claims?

Proprietary schools are required to comply with all SBCC licensing laws in accordance with North Carolina General Statutes Chapter 115D, Article 8. Failure to comply may result in warning letters from the President of the North Carolina Community College System, suspension or revocation of the proprietary school license, civil action from students, and a possible bond claim.

A bond claim may arise if the student has not received contracted instruction, academic services, or other goods and services related to course enrollment for which the student has paid tuition. This generally occurs when a proprietary school ceases to operate for any reason, including suspension, revocation, or nonrenewal for a school’s license, bankruptcy, or foreclosure. The school is legally obligated to reimburse each student for such loss.

If the school neglects or refuses to refund students their prepaid tuition within 30-days of ceasing operation, the President of the North Carolina Community College System (acting on behalf of the SBCC) may make a written demand for reimbursement of damaged students' prepaid tuition. If the school refuses to pay the reimbursement within 60-days from the date the school received the written demand, the student or such other person entitled to a tuition refund may commence a civil action against the school which could result in a bond claim. If the claim is validated by the civil courts, the bond payout will cover the return of the students prepaid tuition, court costs, and a reasonable attorney's fee fixed by the court. It is in the best interest of proprietary schools to initially refund all prepaid tuition to those financially harmed in order to avoid a bond claim.

What Happens If a Claim Is Filed on the Proprietary School Bond?

Contact Jet immediately upon receipt of the court ordered bond claim payout notification. The Jet team will proceed with a review of the claim details. It is important to note that this claim is coming from a state court that has already conducted a full investigation and determined the claim to be justified, so there is only so much Jet can do other than provide payment to the financially damaged person(s).

If the claim is validated by the courts, Jet will make payment up to the full bond limit. The owner of the proprietary school is ultimately responsible for their actions and must reimburse Jet for the paid out bond claim. Failure to do so will result in extreme difficulties obtaining the required Proprietary School Bond when the annual license renewal is due. According to General Statutes Chapter 115D, Article 8, operating a proprietary school without a license or bond may result in a Class 3 Misdemeanor charge.

How to Apply for a Proprietary School Bond?

Jet’s bond application takes only a few minutes to complete! Our online process for the Proprietary School Bond asks for general information such as the name of your institution and the school owner’s social security number. For an approved rate, a soft credit check is complete in seconds. Once you select the monthly or annual option and complete payment, Jet will file the bond for you and send you a copy of the bond form for your records.

Does the Proprietary School Bond Expire?

Not with Jet! If you choose our monthly payment option, there is no need for a bond renewal as payments will continue to come out of your preferred account. The bond will remain active for you to have when your annual proprietary school license renewal occurs. 

If you choose to make payments on an annual basis for this bond, Jet will send a renewal invoice prior to the bond’s expiration date. We do not require any extra paperwork, payment is all that is needed.

If there is a change in the bond limit just let us know, and we will adjust the payment amount as needed.

Can I Cancel My Proprietary School Bond and Get a Refund?

You can cancel this bond at any time with Jet. The Proprietary School Bond is continuous until cancellation is requested by the Surety (Jet). A 30-day written notice stating the date of intended cancellation is required by the SBCC. Liability will be released by the SBCC once the 30-day timeline is complete.

If the monthly option was chosen, Jet will charge for that 30-day period because the bond remains active during that time. If an annual payment option was chosen, Jet will see if there is any premium left on the bond available to be returned to the proprietary school. 

Lenders on annual terms can expect a simple renewal process with Jet. Simply pay the renewal amount and poof - done. We go out of our way to notify you, so the requirement is not missed and thus put your license in jeopardy.

North Carolina Proprietary School Bond Form