North Dakota Postsecondary Educational School/Institution Bond


North Dakota Postsecondary Educational School/Institution Bond

Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your North Dakota postsecondary educational school/institution bond needs.


What Are North Dakota Postsecondary Educational School/Institution Bonds?

These bonds are interchangeably referred to as postsecondary school bonds or postsecondary educational institution bonds. They are intended to protect the contractual rights of students (or their sponsors) who have paid tuition in order to receive certain education services.

The greatest potential for financial harm arises when a postsecondary school goes out of business before students have received all the services their tuition payments entitle them to. A North Dakota postsecondary school bond provides a way for them to recover unearned tuition if the school does not issue refunds voluntarily.

Who Needs Them?

The State Board for Career and Technical Education requires the owners of postsecondary schools applying for approval to operate in North Dakota to purchase a surety bond to protect the contractual rights of students. The bond amount must be no less than 10% of a school’s total gross income, with a minimum of $10,000 and a maximum of $150,000.

Not maintaining an active bond at all times can result in suspension or revocation of a school’s authorization to operate anywhere in North Dakota.


How Do They Work?

There are three parties to a North Dakota postsecondary school bond:

  • The State Board for Career and Technical Education is the “obligee” requiring the bond,
  • The school owner purchasing the bond is the “principal,” and
  • The party guaranteeing the payment of claims is the “surety.”

The bond establishes a contract that is legally binding on all three parties.

The terms of the surety bond agreement legally obligate the principal to pay all claims that the surety determines are legitimate and indemnify the surety for any legal responsibility for claims.

How Are Claims Paid?

When the principal purchases a postsecondary school bond, the surety agrees to extend credit to enable the principal to pay a valid claim, if necessary. Having guaranteed the payment of claims, the surety typically will pay a valid claim initially, which results in a debt that the principal must, by law, repay or face legal action by the surety.

How Much Do They Cost?

Multiplying the required bond amount by the premium rate assigned to the principal by the surety yields the annual premium for a North Dakota postsecondary school bond. The premium rate is assigned through an underwriting process that focuses on the risk of the surety not being repaid for the credit extended to the principal for the payment of claims.

That risk is measured largely on the basis of the principal’s personal credit score. The average well-qualified principal will pay a premium rate that’s in the range of one to three percent. Someone with a low credit score will pay a higher premium rate.



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Our surety bond professionals will get you the North Dakota post secondary school bond you need at a competitive rate.