Private School (Non Degree Granting) ($20,000) Bond - Statewide in Alabama

Brief Summary

A non degree granting career school, trade school or training program in Alabama posts a $20,000 Private School Performance Bond to get licensed by the Alabama Community College System. The bond is continuous, so it is bought once and kept in force rather than rewritten every cycle, and the premium is a yearly charge instead of $20,000 tied up with the state. It attaches to the online license application, so most schools order it before they file.

Alabama requires a $20,000 continuous surety bond, on Form PS-2 and payable to the Alabama Community College System Private School Licensure Division, from every non degree granting private postsecondary institution licensed under Code of Ala. 16-46. Degree granting schools post $50,000 instead. Church operated nonprofit schools, in house employee training, Department of Labor apprenticeships and institutions meeting the grandfather dates in 16-46-3 are exempt from licensure and from the bond.

We can help with all Alabama bonds!

How to Apply for a Private School (Non Degree Granting) ($20,000) Bond:

• Confirm the school does not award degrees. A degree granting institution posts $50,000 instead of $20,000.
• Check Code of Ala. 16-46-3 for an exemption before buying. Church operated nonprofit schools, employer run training and Department of Labor apprenticeships 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.
• 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 (Non Degree Granting) ($20,000) Bond:

The $20,000 figure is for non degree granting schools only

The Alabama Community College System, through its Private School Licensure Division, licenses proprietary schools that teach in Alabama on a campus or by distance learning. Its Guidelines for Private School License effective October 1, 2024 set the school performance surety bond at $20,000 for a non degree granting institution and $50,000 for a degree granting one. The bond is written on Form PS-2 and made payable to the Private School Licensure Division. Code of Ala. 16-46-5 is the statute behind it. It requires every private postsecondary institution not exempted by 16-46-3 to establish financial stability by surety in a penal sum of not more than $20,000, with the exact sum set by the agency under 16-46-7.

What the bond guarantees

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 in administering a course, and to assure faithful performance of the school's agreements with students. The Division's form limits payment to refunds of tuition and fees due an aggrieved student. Aggregate liability never exceeds $20,000 regardless of how many years the bond runs. The surety may cancel on 30 days written notice to the Division and is then relieved of liability for breaches after the cancellation date.

Who is exempt

Code of Ala. 16-46-3 exempts schools operated by a church or religious organization on a nonprofit basis, in house training offered by an employer to its own employees, seminars offered by a professional or trade organization to its members, 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 a bond. Driving schools are licensed under Code of Ala. 32-14 with their own $2,500 bond and are not covered by this page.

Fees, term and financials

The license fee is one half of one percent of the school's actual gross annual income, with a minimum of $1,500 for a non 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. A non degree granting school may file financial statements reviewed or compiled by a certified public accountant, or CPA prepared profit and loss statements, in place of an audit.

Eligibility and Requirements for a Alabama Private School (Non Degree Granting) ($20,000) Bond:

• A surety acceptable to the Alabama Community College System and authorized in Alabama.
• Bond amount of exactly $20,000 for a non 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.
• CPA reviewed or compiled financial statements, or CPA prepared profit and loss statements, with the license application.
• A separate $2,500 per agent bond and agent permit for anyone who solicits students off campus.

Alabama Private School (Non Degree Granting) ($20,000) Bond FAQs:

Official and Additional Resources for the Alabama Private School (Non Degree Granting) ($20,000) Bond: