New Hampshire Private School Bond

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New Hampshire Private 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 New Hampshire Private School bond needs.

What Are New Hampshire Private School Bonds?

New Hampshire private school bonds provide financial protection for students enrolled in private postsecondary career schools that meet the size threshold for licensing and regulatory governance. Such bonds provide financial recourse for students who have not received the educational services promised to them in exchange for the tuition and fees they have paid. 

This is particularly important in the event that a school closes permanently without delivering the educational services specified in the student contract and does not refund prepaid tuition and fees.

Who Needs Them?

As of October 2021, New Hampshire career schools need only be licensed by the New Hampshire Department of Education if their adjusted gross income is $100,000 or more per year. However, smaller schools may need to be licensed if they want to participate in certain federal programs. 

New Hampshire private postsecondary non-degree granting schools that must be, or want to be, licensed may be required to furnish a surety bond. When that is the case, the school’s owner will be informed of the required bond amount.

How Do They Work?

A New Hampshire private school bond is a legally binding contract that brings together three parties known as the obligee, the principal, and the surety. The obligee, the party requiring the bond, is the New Hampshire Higher Education Commission. The principal, the party required to purchase the bond as a condition for licensing, is the private school’s owner. And the surety is the party guaranteeing the payment of claims

When a party has experienced a monetary loss due to the principal’s unlawful or unethical actions, the surety investigates its legitimacy. If the claim is found to be valid, the principal must, by law, pay it.

How Are Claims Paid?

While it’s true that the principal is legally obligated to pay all valid claims, the surety has guaranteed their payment and wants to resolve the matter swiftly. So, the usual practice is for the surety to lend the principal the money to pay the claim, but to pay the claimant directly on the principal’s behalf. The principal must then repay that debt or risk being sued by the surety and end up paying court costs and legal fees and the claim amount.

How Much Do They Cost?

The annual premium for a New Hampshire private school bond is a small percentage of the bond amount—that percentage being the premium rate set by the surety. This premium rate will reflect the underwriting assessment of the risk the surety will take on in agreeing to extend credit to the principal. The main factor in that assessment is the principal’s personal credit score.

A highly creditworthy individual poses little risk to the surety and deserves a low premium rate. Someone with a lower credit score is perceived as a higher risk and will be assigned 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 New Hampshire private school bond you need at a competitive rate.