A private postsecondary or vocational school in Arizona files this surety bond with the Arizona State Board for Private Postsecondary Education to get or keep its license. Under A.R.S. § 32-3023, the bond cannot be less than $15,000, and a non-accredited school applying for a new license is required to file it. The Board can set a higher amount based on your gross tuition revenue and how long you have operated, and there is no fixed statutory maximum. You do not pay the full bond amount. You pay a yearly premium based mainly on your credit.
| Item | Detail |
|---|---|
| Who requires it | Arizona State Board for Private Postsecondary Education (the licensing agency for private vocational programs and degree-granting institutions) |
| Governing law | A.R.S. Title 32, Chapter 30, specifically A.R.S. § 32-3023 (financial security) and § 32-3021 (licensing); rule A.A.C. R4-39-108 |
| Official form | Surety bond on the form prescribed by the Board, filed in your licensing application packet [VERIFY against Arizona State Board for Private Postsecondary Education (ppse.az.gov / e-license portal): exact bond form name or number] |
| Bond amount | $15,000 minimum. No statutory maximum; the Board may require more based on your gross tuition revenue and operating history |
| Premium basis | A yearly premium set by the surety, based mainly on your personal credit and the bond amount, not the full bond value |
| Coverage term | Continuous in form. It stays in effect and on file throughout the time your institution operates |
| Obligee | The State of Arizona, for the benefit of the people protected under A.R.S. § 32-3023, through the Arizona State Board for Private Postsecondary Education |
How much is the bond, and which amount applies to me?
The amount is driven by A.R.S. § 32-3023. The law sets a floor of $15,000 and lets the Board require more. It does not set a ceiling. When the Board considers a higher amount, the statute says it may look at two things: your gross tuition revenue, and the length of time you have been in operation along with your financial position.
Whether you are required to file at all depends on accreditation and whether you are new or renewing.
| Your situation | Is a bond required? | Amount |
|---|---|---|
| New license, institution or program not accredited | Yes. The Board shall require a surety bond, letter of credit, or cash deposit | At least $15,000; the Board may set more based on gross tuition revenue and operating history |
| Renewal, not accredited | The Board may require it | At least $15,000 if required; the Board may set more |
| Accredited (new or renewal) | The Board may require it | At least $15,000 if required; the Board may set more |
| Exact method the Board uses to calculate amounts above $15,000 | [VERIFY against Arizona State Board for Private Postsecondary Education Substantive Policy Statement interpreting A.A.C. R4-39-108: confirm the current method the Board uses to set bond amounts above the $15,000 minimum] | See note above |
A surety bond is one of three accepted forms of financial security. You may instead post a letter of credit or a cash deposit; the same $15,000 minimum applies. The surety company must be authorized to do business in Arizona and rated A or better.
Separately from the bond, A.A.C. R4-39-108 requires licensed institutions to carry (or self-insure for) at least $1,000,000 in single-occurrence professional or malpractice liability coverage and $1,000,000 in single-occurrence general liability coverage. That is insurance, not the bond, and it does not change your $15,000 bond minimum.
What does the bond cover?
The bond protects students and others who are financially harmed by your school. It is written in favor of the State of Arizona for the benefit of the people covered by A.R.S. § 32-3023. In plain terms, it backs your promise to deliver the education students paid for and to pay amounts you owe under the law. A common claim is prepaid tuition for training that was never delivered, for example after a school closes.
A few mechanics from the statute:
- The bond is continuous in form, and total liability is capped at the face amount of the bond.
- A claim against the bond must be brought within one year after the act or omission it is based on.
- If you post a cash deposit instead, it can generally be withdrawn one year after your license ends, once obligations are satisfied.
The bond is financial protection for students, not a guarantee of your school’s quality and not a substitute for following the law.
How much does the bond cost?
You do not pay the full bond amount. You pay a yearly premium, which is a small percentage of the bond amount and is based mainly on your personal credit.
[CLIENT FLAG: premium percentage by credit tier, plus one real worked example such as a $15,000 bond at $X per year for strong credit. Use the client’s live rates only. Do not publish a premium figure until the client supplies it.]
We quote your exact rate before you commit to anything.
Is this the same as accreditation?
No. Accreditation is a separate recognition from an accrediting body. This bond is a financial security requirement under Arizona law that you file with the Arizona State Board for Private Postsecondary Education as part of licensing. Accreditation actually changes the bond picture: a non-accredited school applying for a new license is required to file the bond, while for accredited schools and for renewals the Board has discretion on whether to require it.
It is also not the same as the other obligations tied to your license. The bond is distinct from your liability insurance (the $1,000,000 coverages noted above) and from any Student Tuition Recovery Fund assessment the Board administers. If you also do contracting or another licensed activity, this bond does not cover those; those carry their own bonds.
How do I get bonded and file with the Board?
- Confirm you actually need a license. Some programs are exempt under A.R.S. § 32-3021 (for example, certain trade-association courses for members, recreational or hobby instruction, internal employee training, flight training under federal rules, nursing assistant programs licensed by the nursing board, professional driving schools licensed by ADOT, and short programs under 40 contact hours charging less than $1,000). If you are exempt, you do not need the bond.
- Start your application with the Board through its e-license portal and request the General Information Packet, so you know the exact bond amount the Board expects for your institution.
- Apply for the bond with a surety. We take a short application, check your credit, and quote your premium.
- Pay the premium and receive the executed bond on the form the Board accepts, signed by you as principal and by the surety.
- File the original signed bond with the Arizona State Board for Private Postsecondary Education as part of your application packet.
- Keep it active. The bond must stay in effect and on file the entire time your institution operates. Renew it on schedule so your license does not lapse.
Frequently asked questions
Who has to file this bond?
Private postsecondary institutions and vocational programs that the Arizona State Board for Private Postsecondary Education licenses. A non-accredited school applying for a new license is required to provide financial security; accredited schools and renewals are at the Board’s discretion.
How much is the bond?
At least $15,000. The Board can require more based on your gross tuition revenue and how long you have operated. There is no fixed statutory maximum.
Do I pay the full $15,000?
No. You pay a yearly premium, which is a fraction of the bond amount and is based mainly on your credit. [CLIENT FLAG: typical premium range once the client confirms rates.]
Can I post cash or a letter of credit instead of a surety bond?
Yes. A.R.S. § 32-3023 lets you provide a surety bond, a letter of credit, or a cash deposit. The same $15,000 minimum applies to each. Most schools choose a surety bond because it does not tie up cash.
What happens if my bond lapses or is canceled?
Your license depends on keeping financial security in place. If the bond lapses, you risk being out of compliance with the Board and could face action against your license. Renew before the expiration date and keep the bond on file the entire time you operate.
How long does a claim stay open against the bond?
Under the statute, a claim must be filed within one year after the act or omission it is based on. The bond itself is continuous in form, and total payouts are capped at the bond’s face amount.
What does the bond protect against?
Financial harm to students and others, such as prepaid tuition for training that was not delivered, or amounts your school owes under the law. It does not protect the school; it protects the people the school serves.
Is accreditation required to get the bond?
No. Accreditation is separate. It can affect whether the Board requires the bond, but you can obtain the bond whether or not your school is accredited.
