Learn about beauty school bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are Beauty School Bonds?
Also known as cosmetology school bonds, beauty school bonds are a type of license and permit bond. They are required in most states in order for a career school that prepares students for a career in the beauty industry to obtain and keep a business license.
These bonds serve a two-fold purpose: 1) to ensure that such schools operate in compliance with state law and industry rules and regulations, and 2) to protect the tuition prepaid by students in advance of taking classes.
Who Needs Them?
Depending on the state, the bond requirement may apply to beauty schools, cosmetology schools, barber schools, esthetics schools, and manicure schools.
How Do They Work?
The state agency that licenses private career schools, specifically those that train students to work in the cosmetology or appearance enhancement industry, is the obligee. The school is the principal, and the company that issues the bond is the surety.
One of the main concerns with beauty schools and other private career schools is that the institution might become insolvent and close down while holding unearned income in the form of students’ tuition deposits. A beauty school bond gives students the right to file a claim if that occurs and guarantees a full refund of a student’s prepaid tuition if the surety finds the student’s claim to be valid. Other situations in which claims may be filed against the bond depend on the terms and conditions of the particular bond in question.
If the surety pays a claim, the principal is then legally obligated to reimburse the surety for that amount.
What Do They Cost?
The required amount of the bond varies from state to state. It can be either a flat amount for all schools or a variable amount based on a school’s gross tuition receipts. Whatever the bond amount is for a given school, the premium will be a small percentage of that amount.
The surety will set the premium rate for each bond based on an assessment of the credit score, personal and business financials, license history, and experience of the school’s owners. It can be as little as 1% of the full bond amount for well-qualified applicants with good credit.
Use our convenient online system to apply for a beauty school bond today.
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