It is not uncommon to think that bonds are only needed by people in the construction trade. This is an industry that does include large investments and has a lot of potential physical risks. However, many industries have other risks that are specific to them and the educational field is a great example. Students spend tens of thousands of dollars for their post-secondary education as does the federal government in grants and many corporations through their scholarships. Those investments are lost if the students do not receive what they expect for their tuition.
Why are bonds required?
Most states in the U.S. develop their own list of requirements for in-state and out-of-state colleges and universities. The requirements for Private Post Secondary Education Bonds in Arizona make certain that all post-secondary educational institutions have a current state-issued certificate and employ instructors that meet all state and federal requirements. This ensures that every student graduates with a legitimate degree. It also provides a safety net if a school closes before classes are completed or the school otherwise fails at keeping their end of the contract.
Who pays for the bond?
The university purchases their own bonds through a bonding service. The company must be licensed in the state where the bond is required. The Arizona Department of Insurance oversees the companies working in their state and maintain records on complaints and payouts made by each company. These records are open to the public for viewing.
Who pays when if a problem arises?
The bond service pays the claims if the educational facility breaks a contract, closes or otherwise fails to meet their obligations. This is why these services are cautious about who they agree to bond. They perform credit checks and review the past history of every client before agreeing to sell them a bond.
Private post secondary education bonds are very similar to any type of insurance policy. The bond service charges rates based on their determination of the risks of each applicant. This is typically due to their credit worthiness. A quote is provided after completion of an application and the potential client is able to compare their options between all companies licensed in their state. Visit website name for more information.
