Utah Admin. Code R765-431-4 - Surety Requirements for An Institution with a Low Financial Responsibility Index Score
(1) An institution
with a financial responsibility index score from the Department of Education
between 1.0 and 1.5 shall satisfy the requirement that it is sufficiently
financially stable to participate in SARA by submitting with its application a
surety in the form of a bond, certificate of deposit, or irrevocable letter of
credit.
(2) The amount of the
surety shall be:
(a) $187,500 for an
institution expecting to enroll more than 100 separate individual students,
which are non-duplicated enrollments, during the year it is applying to
participate in SARA;
(b) $125,000
for an institutions expecting to enroll between 50 and 99 separate individual
students during the year it is applying to participate in SARA;
(c) $62,500 for an institutions expecting to
enroll less than 50 separate individual students during the year it is applying
to participate in SARA; and
(d)
$12,500 for an institution that is able to establish that its gross tuition
income from any source during the year it is applying to participate in SARA
will be less than $25,000.
(3) The obligation of the surety shall be
that the institution, its officers, agents, and employees will:
(a) faithfully perform the terms and
conditions of its application to participate in SARA; and
(b) conform to the standards and requirements
required for participation in SARA.
(4) The bond, certificate of deposit, or
letter of credit shall be in a form approved by OCHE and issued by a company
authorized to do such business in Utah.
(5) The bond, certificate of deposit, or
letter of credit shall be payable to OCHE to be used to satisfy any costs,
losses, or damages resulting from the institution's failure to meet any of its
obligations as a participant in SARA.
(6) The surety company may not be relieved of
liability on the surety unless it gives the institution and OCHE 90 calendar
days' notice by certified mail of the company's intent to cancel the
surety.
(7) If at any time the
company that issued the surety cancels or discontinues the coverage, the
institution's eligibility to participate is SARA is automatically revoked as a
matter of law on the effective date of the cancellation or discontinuance of
surety coverage unless a replacement surety is obtained on or before the
cancellation date of the original coverage and provided to OCHE.
Notes
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