2023 New Mexico Statutes › Chapter 21 - State and Private Education Institutions › Article 23 - Post-Secondary Educational Institution Act › Section 21-23-7.1 - Surety bond required; alternative surety.

A. A college, university or career school registered or licensed by the department shall post with the department and maintain in effect a surety bond. The bond shall be payable to the department and shall be sufficient in amount to indemnify any student damaged as a result of fraud or misrepresentation by a registered or licensed college, university or career school or as a result of the college, university or career school ceasing operation prior to its students having completed the programs for which they have contracted.
B. The department is authorized to establish the amount of bond required on an individual basis, taking into consideration factors such as the college's, university's or career school's size, number of students and total income and assets of the college, university or career school in the state. In no case shall the bond be less than five thousand dollars ($5,000) nor shall it exceed twenty percent of a college's, university's or career school's gross annual tuition revenue in New Mexico.
C. Surety bonds may be canceled only following delivery of written notice to the department no less than ninety days prior to the date of cancellation. In case of cancellation, the college, university or career school shall provide the department with a like surety or acceptable alternative in order to maintain licensure.
D. As an alternative to a surety bond, a college, university or career school may elect to and the department may require that a college, university or career school establish and maintain a cash deposit escrow account, irrevocable letter of credit or alternative payable to the department in an amount set by the department and subject to rules promulgated by the department. In no case shall the deposit or account required exceed twenty percent of the college's, university's or career school's gross tuition annual revenue in New Mexico.
History:
1978 Comp., § 21-23-7.1, enacted by Laws 1994, ch. 108, § 12; 2013, ch. 59, § 10.
ANNOTATIONS
The 2013 amendment,
effective June 14, 2013, changed terms to assign administration of the Post-Secondary Educational Institution Act to the higher education department; provided for surety bonds by registered colleges and universities; in Subsections A through D, deleted "commission" and added "department"; in Subsection A, at the beginning of the first sentence, added "college, university or", in the second sentence, after "misrepresentation by a", added "registered or", after "registered or licensed", added "college, university or", and after "as a result of the", added "college, university or"; in Subsection B, in the first sentence, after "factors such as the", added "college's, university's or" and after "assets of the", added "college, university or", and in the second sentence, after "twenty percent of a", added "college's or university's or"; in Subsection C, in the second sentence, after "cancellation, the", added "college, university or"; and in Subsection D, after "surety bond, a", added "college, university or", after "require that a", added "college, university or", and after "and subject to", deleted "regulations" and added "rules", and in the second sentence, after "twenty percent of the", added "college's, university's or".