Surety Bond Requirements for Student Loan Servicers in Kentucky
Companies servicing private and federal student education loans in Kentucky need a Student Loan Servicer License from the Kentucky Department of Financial Institutions, backed by a $100,000 surety bond.
How Much Does a Kentucky Student Loan Servicer Bond Cost?
With Bryant Surety Bonds, the cost of your bond typically starts around 0.75% of the required bond amount, putting the starting price at $750 a year for the $100,000 bond. Your personal credit is the biggest driver of your actual rate. Other factors such as financial statements and previous experience can additionally affect the final price.
Our surety bond cost page breaks down the pricing in more detail.
| License Type | Bond Amount | Starting Cost/Year |
|---|---|---|
| Student Loan Servicer License | $100,000 | $750 |
A low credit score doesn't automatically disqualify you from getting bonded. Through our bad credit bond program, we've bonded many applicants with problematic credit history other sureties passed on.
Our online application is free to submit and doesn't obligate you to buy anything.
Why Do You Need a Student Loan Servicer Bond in Kentucky?
Your bond backs your obligation to service loans in compliance with your Kentucky's licensing requirements. If a borrower is harmed by your noncompliance, or if the department levies fees or fines against you, a claim can be filed against your bond, and your surety pays valid amounts up to the bond's full penal sum. You're then responsible for paying the surety back.
New to how surety bonds work? Our what is a surety bond page covers the basics.
How to Get Bonded
Getting bonded through Bryant Surety Bonds takes three steps.
- Fill out our online application. It takes just a few minutes.
- Get your free quote. We shop your application to 20+ A-rated carriers and issue your bond once you accept our rate.
- We submit your bond to NMLS. Your Electronic Surety Bond (ESB) is filed directly to your NMLS record.
After your quote is approved, we'll walk you through granting us authority as your surety in NMLS, a step the department requires before it will accept the bond.
How Do You Renew Your Bond?
Your renewal application, including updated NMLS information, is due to the Department of Financial Institutions by December 1 each year. Renewal also requires paying an annual assessment fee, set by the commissioner between $5,000 and $20,000. At this point, unfortunately, this is the highest application fee for this type of license among all states with such regulations.
We'll reach out ahead of your renewal date with a reminder, and can look for ways to bring your bond cost down at the same time.
How To Apply for a Student Loan Servicer License in Kentucky?
Here's the general process:
- Set up or update your NMLS account and file the Company Form (MU1).
- Assemble your documentation: formation paperwork, a business plan, a management chart, and personal financial statements for owners with 10% or more interest and executive officers.
- Submit an audited financial statement showing a company net worth of at least $250,000.
- Designate a qualifying individual with at least two years of experience in the student loan industry, along with a resume documenting that experience.
- Complete background checks and credit reports for owners, officers, and the qualifying individual.
- Authorize your surety in NMLS so we can file your Electronic Surety Bond directly to your record.
- Cover the required fees (below).
Full documentation requirements are on the NMLS website.
Kentucky Student Loan Servicer Licensing Fees
| Fee | Amount |
|---|---|
| Application fee | $5,000 |
| License registration fee | $0 |
| NMLS processing fee | $120 |
Background checks and credit reports carry their own separate NMLS fees, listed on the NMLS System Fees page.
Multistate Licensing and Bonding
One NMLS account handles every state you're licensed in, but bonds are state-specific, each one sets its own amount and needs its own Electronic Surety Bond. New Jersey, for comparison, only requires $30,000 for this same license type, far below Kentucky's $100,000.
Bryant Surety Bonds can be your single point of contact no matter how many states you're licensed in, rather than managing a different surety in each one.
Get Bonded With Bryant Surety Bonds
Bryant Surety Bonds holds Kentucky license number 1044898.
Have questions about getting bonded in Kentucky? Give us a call at 866.450.3412.
FAQ
What happens if you don't complete your renewal by December 1?
You can still reinstate your license through January 31 of the following year by submitting all required fees and information. Miss that date too, and your license automatically expires on February 1 by operation of law.
What if your company undergoes a change of control?
You must notify the commissioner in writing within 15 days of learning about the proposed change, and at least 30 days before it takes effect.
Do you need to disclose past money transmission activity?
Yes. Kentucky requires you to disclose whether your company has ever conducted money transmission activity in the state, including transaction totals by year if applicable.
