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Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
Your bond amount is not a fixed number. Delaware ties it to the most prepaid tuition you expect to hold on any single day of the year, with a $25,000 minimum. Getting that figure right before you apply keeps your certificate of approval from stalling, and a surety bond lets you meet the requirement without tying up that much cash.
Delaware requires every private business or trade school seeking a Department of Education certificate of approval to post a surety bond protecting the contractual rights of students. Under 14 Del. C. 8505, the bond equals the highest anticipated gross prepaid tuition held on any day of the year, never less than $25,000, and it is deposited with the Secretary of State.
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Most schools assume there is one flat bond figure. There is not. Title 14, section 8505(b) of the Delaware Code sets two rules.
A school posts only $25,000 if it solicits students in Delaware but receives no revenue for services provided in the state, or if it receives no revenue directly from students for tuition or other services. Revenue for these schools cannot come from guaranteed student loans or state or federal student grants.
Every other private business and trade school operating in or from Delaware, or serving students in Delaware, posts a bond equal to the highest anticipated gross prepaid tuition for students enrolled on any given day of the calendar year for which approval is requested. That figure counts money paid by all students, wherever they live. Section 8505(a)(2) adds that no school's bond may be less than $25,000 per calendar year.
The Delaware Department of Education approves every private business and trade school operating in the state and requires an initial certificate of approval plus an annual renewal. The bond must be in a form and amount the Department approves, written by a surety authorized to do business in Delaware, and deposited with the Secretary of State.
If a school fails to provide the services promised in a student contract, as determined by the Delaware Superior Court, section 8523 allows the bond to be forfeited and the proceeds distributed by the Department to the affected students.
Section 8529 exempts institutions with main facilities in Delaware that were approved by the Department under section 125 of Title 8 before July 18, 1972. It also exempts apprenticeship and training programs run by employers, employer associations, government units or labor organizations for their own employees, prospective employees or members.
The surety may cancel only during or at the end of an annual term, and only after 45 days of written notice by certified mail, return receipt requested, to the Administrator of Private Business and Trade Schools at the Department of Education.
It depends on how much tuition you collect in advance. Most schools post a bond equal to the highest gross prepaid tuition they expect to hold on any single day of the year, counting every student regardless of residence. The minimum is $25,000. Only schools that take no revenue for Delaware services, or no revenue directly from students, stop at the flat $25,000.
It can. The flat $25,000 amount is not available to schools whose revenue comes from guaranteed student loans or state or federal student grants. Those schools use the prepaid tuition calculation.
Students whose contracts the school fails to honor. Under 14 Del. C. 8523, once the Superior Court determines the school failed to provide contracted services, the bond can be forfeited and the Department of Education distributes the proceeds.
The premium is a fraction of the bond amount set by the surety after reviewing the owners' credit and the school's finances. Larger bonds and newer schools usually receive closer review. You get an exact quote when you apply.
Yes. Delaware based institutions approved under 8 Del. C. 125 before July 18, 1972, and in house apprenticeship and training programs run by employers or labor organizations for their own people, fall outside Chapter 85.
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