Mississippi Proprietary School 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 Mississippi Proprietary School bond needs.
What Are Mississippi Proprietary School Bonds?
Mississippi proprietary school bonds are designed to provide financial protection for those who have prepaid tuition and fees in exchange for the educational services set forth in a proprietary school’s student contract.
Any regulatory violation by a proprietary school that causes financial harm to a student (or parent or other sponsor) can result in a claim for damages being filed by the injured party. In the event of a school’s closure, if students do not receive refunds of prepaid tuition/fees directly from the school, the bond provides a way for them to receive compensation.
Who Needs Them?
In Mississippi, proprietary schools are licensed by the Commission on Proprietary School and College Registration (CPSCR) and subject to the regulations contained in the Mississippi Proprietary School and College Registration Law, Chapter 60, Mississippi Code of 1972, as amended. The bonding requirement applies to all proprietary schools offering vocational, occupational, or technical education at the postsecondary level.
The required amount for a Mississippi proprietary school bond is $50,000.
Every proprietary school must purchase a $50,000 surety bond to become licensed and must renew it continuously to prevent license suspension or revocation.
How Do They Work?
A Mississippi proprietary school bond forms a legally binding contract among these three parties:
- CPSCR, as the party requiring the bond, is known as the obligee.
- The owner of the proprietary school, the party required to purchase the bond and legally obligated to pay valid claims against it, is the principal.
- The party guaranteeing the bond, specifically guaranteeing the payment of claims, is the surety.
Upon receipt of a claim against a school’s surety bond from a party who has incurred a financial loss due to the actions of the bond’s principal, the surety will investigate it before approving it for payment.
How Are Claims Paid?
Although the obligation to pay valid claims belongs entirely to the principal, the surety, having guaranteed payment, will release payment to the claimant. That payment is an extension of credit to the principal and must be repaid to the surety, who is indemnified against any legal responsibility for paying claims.
How Much Do They Cost?
The annual premium for a Mississippi proprietary school bond is the result of multiplying the $50,000 bond amount by the premium rate the surety sets on a case-by-case basis. That premium rate is directly related to the risk of the surety not being repaid for claims paid on behalf of the principal. The underwriters rely heavily on the principal’s personal credit score in making that determination.
The higher the credit score, the lower the risk level and the premium rate. A lower credit score indicates higher risk and warrants a higher premium rate.
The average well-qualified principal will pay a premium rate that’s in the range of one to three percent.
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Our surety bond professionals will get you the Mississippi proprietary school bond you need at a competitive rate.
