Texas Administrative Code › Title 19 - EDUCATION › Part 1 - TEXAS HIGHER EDUCATION COORDINATING BOARD › Chapter 7 - DEGREE GRANTING COLLEGES AND UNIVERSITIES OTHER THAN TEXAS PUBLIC INSTITUTIONS › Subchapter A - GENERAL PROVISIONS › Section 7.16 - Financial Protections for Student Tuition and Fees

Current through Reg. 49, No. 28; July 12, 2024
The Board is required to ensure Certificate of
					 Authorization and Certificate of Authority institutions maintain reserves,
					 lines of credit, or surety instruments sufficient to allow the institution or
					 person to fulfill its educational obligations of the current term to its
					 enrolled students if the institution or person violates any minimum standard
					 which results in loss of prepaid tuition or fees, or is unable to continue to
					 provide instruction to its enrolled students.
(1) Sufficient Financial Resources
				  Documentation.
(A) Sufficient financial
				  resources may be demonstrated by proof of an adequate reserve, line of credit,
				  or surety instrument. A surety instrument includes but is not limited to, a
				  surety bond, an assignment of a savings or escrow account, certificate of
				  deposit, irrevocable letter of credit, or a properly executed participation
				  contract with a private association, partnership, corporation, or other entity
				  whose membership is comprised of postsecondary institutions.
(B) The documented reserves, lines of credit,
				  or surety instruments must be:
(i) In a form
				  and amount acceptable to the Board;
(ii) In an amount equal to or greater than
				  the cost of providing a refund, including administrative costs associated with
				  processing claims, for the maximum unearned tuition and fees of the institution
				  for a period or term during the applicable academic year for which programs of
				  instruction are offered, including, but not limited to, on a semester, quarter,
				  monthly, or class basis; except that the period or term of greatest duration
				  and expense shall be utilized for this computation where an institution's year
				  consists of one or more such periods or terms. Unearned tuition and fees are
				  tuition or fees billed to a student for the current term. No tuition or fee
				  billed for the current term may be considered earned by the institution until
				  the current term has been completed and students have received grades for
				  courses taken during the term;
(iii) Conditioned to provide indemnification
				  to any student or enrollee of the school or his/her parent or guardian
				  determined by the Board to have suffered loss of unearned tuition or any fees
				  as a result of violation of any minimum standard or as a result of the
				  institution ceasing operation, provide evidence satisfactory to the Board of
				  its financial ability to provide such indemnification, and list the amount of
				  surety liability the guaranteeing entity will assume; and
(iv) Held in Travis County, Texas, and
				  conditioned to allow only the Board to withdraw funds for the benefit of
				  persons identified in clause (iii) of this subparagraph.
(C) The institution shall include a letter
				  signed by an authorized representative of the institution showing in detail the
				  calculations made pursuant to this section and explaining the method used for
				  computing the amount of the reserves, lines of credit or surety
				  instrument.
(D) Falsifying surety
				  calculation or surety instrument will be reported to the Attorney General per
				  §
											7.5(m)
				  of this title (relating to Degree Granting Colleges and Universities Other Than
				  Texas Public Institutions).