License & Permit
Student Loan Servicer Bond
A student loan servicer bond is a license bond some states require before a company can collect and manage student loan payments for borrowers in that state.
- Required by
- State financial regulators (for example, California DFPI), usually filed through NMLS
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The bond runs to the state financial regulator and promises that the servicer will follow the state's servicing law. Borrowers or the state can claim against it for losses caused by the servicer's violations. After a payout, the servicer must repay the surety and may have to file a new bond quickly to keep its license.
Who needs it
- Student loan servicing companies
- Private student loan servicers
- Nonbank servicers handling federal or private loans
What the underwriter looks at
- Dollar volume of loans serviced
- Company financial statements
- Owner credit
- Regulatory history
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How much bond does California require?
It depends on the dollar value of loans you serviced last year: $25,000 up to $50 million, $50,000 up to $100 million, $75,000 up to $250 million, and $100,000 above that. One bond covers all your locations.
Do banks need this bond?
Usually not. California excludes banks, credit unions, savings institutions, and some schools servicing their own loans. Other states have similar exemptions.
Which states require it?
A growing number, including California and several others with recent servicer licensing laws. Amounts and filing rules vary, so check each state where your borrowers live.