Citations Affected: IC 20-12.
Synopsis: Postsecondary proprietary education. Raises the amounts of
surety bonds required from postsecondary proprietary educational
institutions, and increases the mature balance in the career college
student assurance fund. Establishes minimum standards for the owners
and chief administrators of postsecondary proprietary educational
institutions.
Effective: July 1, 2006.
January 10, 2006, read first time and referred to Committee on Education.
January 19, 2006, reported _ Do Pass.
January 25, 2006, read second time, amended, ordered engrossed.
A BILL FOR AN ACT to amend the Indiana Code concerning
education.
more than five thousand dollars ($5,000) but less than fifty
thousand dollars ($50,000), the institution shall secure a surety
bond in the amount of five thousand dollars ($5,000).
(4) If the postsecondary proprietary educational institution's
annual gross tuition charges assessed for the previous year are
more than fifty thousand dollars ($50,000) but less than five
hundred thousand dollars ($500,000), the institution shall secure
a surety bond in the amount of ten percent (10%) of that
institution's annual gross tuition charges assessed for the previous
year.
(5) (2) If at any time the postsecondary proprietary educational
institution's projected annual gross tuition charges assessed for
the previous year are more than five hundred two hundred fifty
thousand dollars ($500,000), ($250,000), the institution shall
secure a surety bond in the amount of fifty thousand dollars
($50,000).
(b) When a postsecondary proprietary educational institution is
required to contribute to the fund and the fund has a balance on the
date that the surety bond is due of at least:
(1) one hundred thousand dollars ($100,000), the commission
shall reduce the penal sum of the surety bond described in
subsection (a) by twenty percent (20%);
(2) two hundred thousand dollars ($200,000), the commission
shall reduce the penal sum of the surety bond described in
subsection (a) by forty percent (40%);
(3) three hundred thousand dollars ($300,000), the commission
shall reduce the penal sum of the surety bond described in
subsection (a) by sixty percent (60%);
(4) four hundred thousand dollars ($400,000), the commission
shall reduce the penal sum of the surety bond described in
subsection (a) by eighty percent (80%); or
(5) five hundred thousand dollars ($500,000), the commission
shall reduce the penal sum of the surety bond described in
subsection (a) by one hundred percent (100%).
(c) (b) After June 30, 2006, and except as provided in:
(1) section 21 of this chapter; and
(2) subsection (f); (e);
and upon the fund achieving at least an initial five hundred thousand
one million dollar ($500,000) ($1,000,000) balance, each
postsecondary proprietary educational institution that contributes to the
fund when the initial quarterly contribution as is required under this
chapter after the fund's establishment is not required to make
contributions to the fund or submit a surety bond.
(d) (c) The commission shall determine the number of quarterly
contributions required for the fund to initially accumulate five hundred
thousand one million dollars ($500,000). ($1,000,000).
(e) (d) Except as provided in section 21 of this chapter and
subsection (f), (e), postsecondary proprietary educational institutions
that begin making contributions to the fund after the initial quarterly
contribution as required under this chapter are (1) required to make
contributions to the fund for the same number of quarters as
determined by the commission under subsection (d); and (c).
(2) after making the contributions to the fund as provided in
subdivision (1) for the required number of quarters, may not be
required to submit a surety bond.
(f) (e) If, after the fund acquires five hundred thousand one million
dollars ($500,000) ($1,000,000) the balance in the fund becomes less
than one five hundred thousand dollars ($100,000), ($500,000), all
postsecondary proprietary educational institutions not required to make
contributions to the fund as described in subsection (c) (b) or (e) (d)
shall make contributions to the fund for the number of quarters
necessary for the fund to accumulate five hundred thousand one
million dollars ($500,000). ($1,000,000).
fifty thousand dollars ($25,000); ($50,000); and
(2) the commission determines that the student is eligible for a
reimbursement under the fund;
the commission shall prorate the amount of the reimbursement to
ensure that the balance of the fund does not become less than
twenty-five fifty thousand dollars ($25,000), ($50,000), and the student
is entitled to receive that balance of the student's claim from the fund
as money becomes available in the fund from contributions to the fund
required under this chapter.
(g) The commission shall ensure that all outstanding claim amounts
described in subsection (f) are paid as money in the fund becomes
available in the chronological order of the outstanding claims.
(h) A claim against the fund may not be construed to be a debt of the
state.
educational institution meets minimum standards that are appropriate
to that type or class of postsecondary proprietary educational
institution, including the following minimum standards:
(1) The postsecondary proprietary educational institution has a
sound financial structure with sufficient resources for continued
support.
(2) The postsecondary proprietary educational institution has
satisfactory training or educational facilities with sufficient tools,
supplies, or equipment and the necessary number of work stations
or classrooms to adequately train, instruct, or educate the number
of students enrolled or proposed to be enrolled.
(3) The postsecondary proprietary educational institution has an
adequate number of qualified instructors or teachers, sufficiently
trained by experience or education, to give the instruction,
education, or training contemplated.
(4) The advertising and representations made on behalf of the
postsecondary proprietary educational institution to prospective
students are truthful and free from misrepresentation or fraud.
(5) The charge made for the training, instruction, or education is
clearly stated and based upon the services rendered.
(6) The premises and conditions under which the students work
and study are sanitary, healthful, and safe according to modern
standards.
(7) The postsecondary proprietary educational institution has and
follows a refund policy approved by the commission.
(8) The owner or chief administrator of the postsecondary
proprietary educational institution has not:
(A) been convicted of:
(i) a felony related to fraud or the operation of an
educational institution; or
(ii) a violent felony; and
(B) been the owner or chief administrator of an
educational institution that has had its accreditation
revoked or has been closed involuntarily in the five (5) year
period preceding the application for accreditation.