Private School (Degree Granting) ($50,000) Bond - Statewide in Alabama

Brief Summary

A degree granting proprietary school in Alabama posts a $50,000 Private School Performance Bond before the Alabama Community College System will issue its license. The bond runs continuously, so it is bought once and renewed rather than rewritten each cycle, and the premium is a yearly charge rather than $50,000 held by the state. Order it early, because the license application is reviewed with the bond attached.

Alabama requires a $50,000 continuous surety bond, on Form PS-2 and payable to the Alabama Community College System Private School Licensure Division, from every degree granting private postsecondary institution licensed under Code of Ala. 16-46. Non degree granting schools post $20,000 instead. Church schools, accredited institutions that meet the grandfather dates in 16-46-3 and a handful of other categories are exempt from licensure and from the bond.

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How to Apply for a Private School (Degree Granting) ($50,000) Bond:

• Confirm the school is degree granting, which sets the bond at $50,000 rather than the $20,000 required of non degree granting schools.
• Check Code of Ala. 16-46-3 for an exemption before buying. Church operated nonprofit schools and institutions meeting the 1980 and 2004 accreditation grandfather dates do not post the bond.
• Provide the school's exact legal name as it will appear on the Private School Licensure Division application.
• Owner or principal name, address and Social Security number for the credit review, plus the school's most recent financial statements if the surety asks.
• Review the quote, pay the premium and receive the executed Form PS-2 bond payable to the Private School Licensure Division.
• Upload or file the bond with the online license application through the Division's portal along with the license fee.

Detailed Information About the Alabama Private School (Degree Granting) ($50,000) Bond:

Degree granting means $50,000, not $20,000

The Alabama Community College System, through its Private School Licensure Division, sets two bond amounts in its Guidelines for Private School License effective October 1, 2024. A degree granting institution posts a school performance surety bond of $50,000. A non degree granting institution posts $20,000. The bond must be written on Form PS-2 and made payable to the Private School Licensure Division. Code of Ala. 16-46-5 is the underlying statute, and it describes the surety as a penal sum of not more than $20,000 with the actual figure set by the agency under 16-46-7, so the $50,000 figure comes from the Division's current guidelines rather than from the statute itself. Confirm the amount with the Division before the bond is issued.

What the bond does

Under 16-46-5 the surety is continuous and is conditioned to indemnify any student who suffers a loss from fraud or misrepresentation used in procuring enrollment or administering a course, and to assure faithful performance of the school's agreements with students. Aggregate liability never exceeds the penal sum no matter how many years the bond stays in force. The surety may cancel on 30 days written notice to the Division and is then off the hook for breaches after the cancellation date, which means the school must replace the bond before that date to keep its license.

Who is exempt

Code of Ala. 16-46-3 exempts, among others, schools operated by a church or religious organization on a nonprofit basis, in house employee training, apprenticeship programs approved by the United States Department of Labor, schools already approved by another state regulatory body, resident schools in continuous operation for at least 20 years that held accreditation on April 29, 1980, and accredited proprietary institutions that had operated in Alabama for at least five years as of July 1, 2004. An exempt school may still ask to be licensed without posting a bond.

Accreditation is required and does not waive the bond

Every degree granting institution must be accredited by an agency recognized by the United States Department of Education or the Council for Higher Education Accreditation, or be a candidate or applicant for that accreditation. Accreditation alone does not remove the bond. The bond is waived only for schools that qualify for an exemption under 16-46-3.

Fees and term

The license fee is one half of one percent of the school's actual gross annual income, with a minimum of $2,750 for a degree granting school and a maximum of $17,500. A license is valid for two years from the date of issue. The Division sends renewal notice at least 60 days before expiration, and renewal materials filed after the expiration date draw a late fee of $75 per day. Degree granting schools file audited financial statements with the application.

Eligibility and Requirements for a Alabama Private School (Degree Granting) ($50,000) Bond:

• A surety acceptable to the Alabama Community College System and authorized in Alabama.
• Bond amount of exactly $50,000 for a degree granting institution, with aggregate liability capped at that figure.
• Form PS-2, payable to the Alabama Community College System Private School Licensure Division as obligee.
• A continuous bond that stays in force until cancelled on 30 days written notice to the Division.
• Accreditation, or candidate or applicant status, with a USDE or CHEA recognized agency, which is a licensing requirement and not a bond substitute.
• Audited financial statements and the most current federal income tax return with the license application.

Alabama Private School (Degree Granting) ($50,000) Bond FAQs:

Official and Additional Resources for the Alabama Private School (Degree Granting) ($50,000) Bond: