§ 11-203. Bonds or financial guarantees required by institutions
West's Annotated Code of MarylandEducationEffective: April 11, 2023
Effective: April 11, 2023
MD Code, Education, § 11-203
§ 11-203. Bonds or financial guarantees required by institutions
(a)(1) Subject to paragraph (2) of this subsection, the Commission may require any institution of postsecondary education that is required to obtain a certificate of approval or an institution of higher education that is required to register under § 11-202.2 of this subtitle to furnish a performance bond or other form of financial guarantee for either the certificate of approval or the registration to the State conditioned that the institution will:
(2) In addition to and separate from the requirements of subsection (d)(4) of this section, the Commission shall require each private career school and for-profit institution of higher education that operates in the State, and each for-profit institution of higher education that is required to register with the Commission under § 11-202.2 of this subtitle, to furnish a performance bond or irrevocable letter of credit in an amount equal to the school's or institution's non-Title IV adjusted gross tuition and fees for the prior July 1 through June 30.
(b)(1) Except as provided under subsection (a)(2) of this section and subject to paragraph (2) of this subsection, any bond or guarantee required under this section shall be in the form and amount the Secretary requires.
(c)(1) The total liability of a surety on a bond or guarantee under this section may not exceed the amount of the bond or guarantee.
(d)(1) By regulation, the Commission:
(ii) 1. The fund for institutions of higher education that are required to register under § 11-202.2 of this subtitle shall be used to reimburse any student at any of these institutions who is entitled to a refund of tuition and fees because the institution has failed to perform faithfully any agreement or contract with the student or failed to comply with any provision of this article.
2. A. After 3 years of claims history during which no claim against the fund has been sustained on behalf of a Maryland student participating in a fully online distance education program offered in the State by an institution registered under § 11-202.2 of this subtitle, the Commission shall exempt that institution from the requirement to contribute to the fund.
B. Notwithstanding subsubsubparagraph A of this subsubparagraph, an institution shall be required to contribute to the fund following a claim against the fund being sustained on behalf of a Maryland student participating in a fully online distance education program offered in the State by the institution.
(4)(i) Each for-profit institution of higher education or private career school that is required to obtain a certificate of approval and, subject to paragraph (2)(iii)2 of this subsection, each institution of higher education required to register under § 11-202.2 of this subtitle shall pay an annual fee into the appropriate fund.
(ii) The Commission shall determine the amount of the fee based on the probable amount of money needed for the funds for each fiscal year. If the money in the guaranty funds is insufficient to satisfy duly authorized claims, the participating institutions may be reassessed and shall pay the additional amounts required.
(iv) The Commission shall deposit into the appropriate fund any penalty assessed against a for-profit institution of higher education, institution of higher education required to register under § 11-202.2 of this subtitle, or private career school, respectively, under the terms of § 11-204 of this subtitle.
(e)(1) An institution that closes one or more programs in a manner that is a disorderly closure as defined in § 11-211 of this subtitle is in violation of the enrollment agreement or other contract with a student enrolled at the time of the closure.
(f) On or before December 1 each year, the Commission shall report to the Governor and, in accordance with § 2-1257 of the State Government Article, the General Assembly, regarding:
Credits
Added by Acts 1988, c. 246, § 2, eff. July 1, 1988. Amended by Acts 1992, c. 10; Acts 2001, c. 29, § 6, eff. April 10, 2001; Acts 2011, c. 277, § 1, eff. June 1, 2011; Acts 2011, c. 277, § 2, eff. July 1, 2011; Acts 2012, c. 66, § 1, eff. April 10, 2012; Acts 2012, c. 595, § 1, eff. July 1, 2012; Acts 2012, c. 596, § 1, eff. July 1, 2012; Acts 2013, c. 43, § 1, eff. April 9, 2013; Acts 2013, c. 490, § 1, eff. July 1, 2013; Acts 2016, c. 552, § 1, eff. Oct. 1, 2016; Acts 2016, c. 553, § 1, eff. Oct. 1, 2016; Acts 2018, c. 835, § 1, eff. May 26, 2018; Acts 2018, c. 836, § 1, eff. May 26, 2018.; Acts 2019, c. 8, § 5; Acts 2020, c. 554, § 2, eff. July 1, 2020; Acts 2023, c. 49, § 2, eff. April 11, 2023.
MD Code, Education, § 11-203, MD EDUC § 11-203
Current through legislation effective through May 9, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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