Illinois private business and vocational schools surety bond requirement

vocational schools

Intending to improve the way Illinois provides “for the protection, education, and welfare of the citizens…and welfare of the students of its private business and vocational schools,” the Private Business and Vocational Schools Act of 2012 took effect on February 1, 2012. The purpose of the law is to “facilitate and promote quality education and responsible, ethical, business practices in each of the private business and vocational schools enrolling students.”

Private businesses and vocational schools covered under the law must now file an Illinois surety bond to receive and maintain a permit of approval. This bond not only ensures that institutions will adhere to all contracts and agreements but also serves as a written agreement that provides for monetary compensation in the event that a school fails to fulfill its obligations to students and their parents, guardians or sponsors. As such, the bond amount must be enough to provide for the reimbursement of full tuition to all students enrolled at the institution in the event of a closure.

The bond specifications of section 1095.210 of the Private Business and Vocational Schools Administrative Rules are as follows.

  • A school shall supply the Board with a copy of a fully executed, continuous surety bond written by a company authorized to do business in Illinois in an amount sufficient to provide cumulative unearned prepaid tuition for the Illinois students enrolled at any one time. The amount shall be no less than $10,000.
  • The school shall submit its projection of greatest amount of unearned prepaid tuition with its initial application for a certificate and the actual amount, based upon the record of the previous fiscal year, with each succeeding application.
  • Should the Board determine after applying the provisions of this Section that the school must increase the amount of bond coverage, the school shall file a bond rider acknowledging increased coverage within 30 calendar days of receipt of the Board’s notice requiring such increase.
  • In the event of cancellation of the bond by a bonding company, the school shall furnish a fully executed replacement bond to the Board within 30 calendar days of the Board’s receipt of the notice of cancellation.
  • The bonding company shall on the Board’s request provide reasons for bond termination within 30 calendar days of the Board’s receipt of notice of such termination.
  • Termination of the school’s surety bond coverage shall be grounds for revocation of its permit of approval.
  • When the school provides instruction at extensions, the surety bond or riders attached thereto shall indicate coverage for all Illinois students at all sites when instruction is or will be given.

Contact the Illinois Board of Higher Education with questions about the legislation. If you need help obtaining a surety bond to fulfill the Private Business and Vocational Schools Act of 2012, contact a surety specialist online or by phone at 1 (800) 308-4358. has a history of helping applicants get bonded for the best rate possible.

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