Illinois laws

Illinois Private Business and Vocational Schools Act Guide

Learn what the Illinois Private Business and Vocational Schools Act says about IBHE approval, fees, renewal dates and penalties, with slides and a checklist.

Last reviewed October 29, 2026 · General information, not legal advice

General information only, not legal advice. CPA Tax Payroll and Accounting Corp is a CPA firm, not a law firm. Laws change: confirm with the official source or a licensed attorney before you act. Read the full notice.

The Private Business and Vocational Schools Act of 2012 (105 ILCS 426) is the Illinois law that requires a private business and vocational school to hold a permit of approval from the Illinois Board of Higher Education (IBHE) before it operates. IBHE's Division of Private Business and Vocational Schools administers it. This page is for owners and advisers of training programs in Illinois. Whether the Act applies to any particular business is a legal question. IBHE decides it on an application, a lawyer can advise on it, and a court settles any dispute. This page only reports what the statute, the rules and IBHE's pages say.

Slide show: The Vocational Schools Act in seven slides

  1. What it is

    Illinois requires IBHE approval for private business and vocational schools that prepare people for jobs and skills (105 ILCS 426).

  2. Who it covers

    Privately run schools charging tuition for trade, business, technical or similar training, in person or online. The statute lists exemptions.

  3. The core rule

    The permit comes before operating. Before it issues, advertising or recruiting students needs IBHE's authorization first.

  4. The key number

    Permit fees run $1,000 to $5,000 by school size, and annual renewal $500 to $3,000, under the 2017 rule table.

  5. The deadline

    IBHE lists renewal dates of April 25 or June 25 and does not accept filings more than 30 days late.

  6. The penalty

    Up to $10,000 per violation for operating without a permit, and each day counts separately.

  7. A practical tip

    The rules and fee table date from 2017, before the 2022 to 2025 law changes, so confirm current amounts with IBHE.

Who is covered

QuestionWhat the text says
Who needs a permit (Sec. 20)A person subject to the Act who runs a private business and vocational school, or who creates a course to sell to one, needs an IBHE permit of approval before operating
What is a "school" (Sec. 15)A privately run institution that charges tuition, on site or by distance education, to prepare people for a trade, a non-professional occupation or a profession not state-licensed, or to add to job skills
Separate approvalEach non-degree program, location and classroom extension; approval is not transferable
Exemptions (Sec. 30)Nine categories, such as religion-only teaching, employer in-service programs that charge no tuition and serve only employees, degree-focused accredited institutions and registered apprenticeships sponsored by labor organizations; each has conditions
Who decidesIBHE approves or denies an exemption application; a dispute is a legal matter

How it touches your taxes and payroll

The Act has no tax provision. Its surety bond (a bond that repays students if a school closes) is sized to prepaid, unearned tuition, and IBHE fees are paid by check or money order. How tuition and school fees are taxed lies outside this Act. Schools that hire instructors still face ordinary payroll questions, such as employee or independent contractor status.

Next, read the rules and numbers or the checklist and FAQs, which sets out the Chalk-Line Permit Check. Related Illinois law: the Consumer Fraud Act, which treats certain violations of this Act as unlawful practices. See also our Illinois state page and small business owners.

Official sources

This page is a plain-language summary. The official source controls if there is any difference.