Ohio Administrative Code › Title 3332 - State Board of Career Colleges and Schools › Chapter 3332-1 - General Provisions › Section 3332-1-13 - Surety Bonds

Current through all regulations passed and filed through July 1, 2024
(A) Pursuant to section
			 3332.08 of the Revised Code, the
			 application for a certificate of registration shall be accompanied by a surety
			 bond in the penal sum as determined by section (E) of this rule. The bond shall
			 be in a form prescribed by the state board of career colleges and schools with
			 at least one corporate bonding company approved by the department of insurance
			 as surety thereon. Bond shall be maintained in effect for a period as
			 determined by section (F) of this rule. The bond shall provide for
			 indemnification of any person suffering prepaid tuition loss as the result of a
			 school closure, program termination or other acts or omissions resulting in the
			 cancellation, revocation, or expiration of a certificate of registration or
			 program authorization.
(B) The
			 liability of the surety on the bond shall not exceed the sum of the face value
			 of the bond as determined by the board as an aggregate for all students for all
			 breaches of the conditions of the bond by the school. The term of the bond
			 shall be continuous, but it shall be subject to cancellation by the surety in
			 the manner described in this rule.
(C) The surety may terminate the bond upon
			 giving a sixty-day written notice to the principal and to the state board of
			 career colleges and schools, but the liability of the surety for the acts of
			 the principal continues during the sixty days of the cancellation notice. The
			 notice does not absolve the surety from liability which accrues before the
			 cancellation becomes final, but which is discovered after that date and which
			 may have arisen at any time during the term of the bond. Unless the bond is
			 replaced by that of another surety before the expiration of the sixty days
			 notice of cancellation, the school's certificate of registration shall be
			 suspended.
(D) Any person subject
			 to this section required to file a bond with an application for a certificate
			 of registration, may file, in lieu thereof, cash, a certificate of deposit, or
			 government bonds in the amount of the face value of the bond as determined by
			 the board. The deposit is subject to the same terms and conditions as are
			 provided for in the surety bond required herein. Any interest or earnings on
			 such deposits are payable to the depositor.
(E) Penal sum of bond
(1) The minimum penal sum of any bond
			 maintained by a registered school under this rule shall be ten thousand
			 dollars.
(2) A registered school
			 will be required to maintain a bond with a penal sum in excess of ten thousand
			 dollars if it meets any of the following conditions:
(a) The school fails to meet the board's
			 standards of fiscal responsibility.
(b) The school maintains over one hundred
			 thousand dollars in prepaid tuition revenue as calculated by the board and
			 excluding prepaid tuition revenue that consists of government grants or federal
			 student loans and grants authorized under Title IV of the "Higher Education Act
			 of 1965,"
			 20 U.S.C.
			 1070 et seq., as amended.
(3) A school that fails to meet
			 the board's standards of fiscal responsibility shall be required to maintain a
			 bond in a penal sum equal to fifty percent of the school's prepaid tuition
			 revenue as calculated by the board.
(4) A school that maintains over one hundred
			 thousand dollars in prepaid tuition revenue as calculated by the board and
			 excluding prepaid tuition revenue that consists of government grants or federal
			 student loans and grants authorized under Title IV of the "Higher Education Act
			 of 1965,"
			 20 U.S.C.
			 1070 et seq., as amended, shall be required
			 to maintain a bond in the penal sum of ten thousand dollars plus fifty percent
			 of the school's prepaid tuition revenue that exceeds one hundred thousand
			 dollars as calculated by board.