North Carolina — Post-Secondary Proprietary School Bond

The North Carolina Post-Secondary Proprietary School Bond is a regulatory requirement for privately owned proprietary schools operating within the state. It acts as financial security to protect students by ensuring the school fulfills its contractual and financial obligations regarding prepaid tuition and fees.

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Recorded state: North Carolina
Bond type: Private / Career School Bond
Category: Schools & education

What this bond does

The bond provides a source of indemnification for students, parents, or guardians if a school ceases operations. This protection applies in the event of a school closure caused by bankruptcy, foreclosure, or the suspension, revocation, or nonrenewal of the school's state-issued operating license.

Who needs it: Owners and operators of proprietary schools that offer vocational, educational, or professional training to individuals who have completed secondary education or are beyond compulsory school age, and who charge tuition or receive consideration for instruction.
Who it protects: This bond protects the interests of the enrolled students and their guardians. It serves as a financial safeguard against the loss of prepaid tuition, fees, or other instructional expenses should the school fail to provide the promised educational services.

Your bond option

This is the option on record for this bond.

Bond option
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The bond amount describes the limit of the bond obligation, not the price. A listed amount does not establish what the requesting party requires. The premium is what you pay and must be confirmed for the actual option. An E&O limit, where listed, is separate errors and omissions insurance.

Licensing and Mandatory Compliance

Operating a proprietary school in North Carolina requires a license granted by the State Board of Community Colleges, acting through the State Board of Proprietary Schools. As a condition of this licensure, schools must provide evidence of financial stability and legitimate operating practices.

The bond is a critical component of the application process. Failure to secure the required bond or provide an approved alternative, such as a state-assigned savings account or certificate of deposit, can result in the denial of a license or the suspension of existing school operations.

Determining Bond Amounts

For initial licensure, the bond must be at least twenty-five thousand dollars. The State Board determines the specific amount needed to provide adequate indemnification based on projected student enrollment and tuition liability.

Schools renewing their licenses must calculate the bond amount based on the highest level of unearned paid tuition held during the previous fiscal year. Quarterly evaluations are required for schools licensed between one and six years, with adjustments necessary if the required bond amount increases by five percent or more.

Execution and Filing Procedures

The bond must be executed by the applicant as the principal and by a bonding company authorized to conduct business within North Carolina. It must be made payable to the State Board of Community Colleges and remain active until formally canceled by the issuer.

Bonding companies may cancel the coverage upon providing thirty days' notice to the State Board. In addition to the bond, proprietary schools must pay required assessments into the Student Protection Fund, as the state will exhaust bond proceeds before utilizing fund assets to cover student claims.

Sources

North Carolina General Statutes Article 8: Proprietary Schools (opens in a new tab)Checked October 18, 2026

Have these ready

Compile accurate records of your school's unearned prepaid tuition and fees for the previous fiscal year.
Obtain a current, certified copy of the school bulletin or catalog to submit with your license application.
Verify the financial resources available to maintain the school and ensure your facility meets all local fire, building, and sanitation codes.
Calculate the required bond amount based on your specific school's enrollment and tuition structure.

Questions about this bond

Is the bond transferable if I sell my school?

No. A license and its associated bond are not transferable to new owners. Upon the sale of a school, the new owner must secure their own licensing and bond coverage.

What happens if I cannot secure a standard surety bond?

You may request a waiver from the State Board of Community Colleges to utilize an alternative, such as an assignment of a savings account or a certificate of deposit held in a North Carolina-based financial institution.

Are all private schools required to have this bond?

Generally, yes, unless specifically exempt. Exemptions exist for certain nonprofit religious institutions, employer-conducted training for employees, or schools regulated under different state agencies.

Does the bond cover claims made against the Student Protection Fund?

The bond is the primary source of repayment. The State Board of Community Colleges will issue repayments from the bond first before seeking to cover any remaining qualified claims through the Student Protection Fund.

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