(a) New institutions that have been granted conditional approval for degrees or names to allow them the opportunity to apply for and receive accreditation under section 136A.65, subdivision 7, shall provide a surety bond in a sum equal to ten percent of the net revenue from tuition and fees in the registered institution's prior fiscal year, but in no case shall the bond be less than $10,000.
(b) Any registered institution that is notified by the United States Department of Education that it has fallen below minimum financial standards and that its continued participation in Title IV will be conditioned upon its satisfying either the Zone Alternative, Code of Federal Regulations, title 34, section 668.175, paragraph (f), or a Letter of Credit Alternative, Code of Federal Regulations, title 34, section 668.175, paragraph (c), shall provide a surety bond in a sum equal to the "letter of credit" required by the United States Department of Education in the Letter of Credit Alternative, but in no event shall such bond be less than $10,000 nor more than $250,000. If the letter of credit required by the United States Department of Education is higher than ten percent of the Title IV, Higher Education Act program funds received by the institution during its most recently completed fiscal year, the office shall reduce the office's surety requirement to represent ten percent of the Title IV, Higher Education Act program funds received by the institution during its most recently completed fiscal year, subject to the minimum and maximum in this paragraph.
(c) In lieu of a bond, the applicant may deposit with the commissioner of management and budget:
(1) a sum equal to the amount of the required surety bond in cash;
(2) securities, as may be legally purchased by savings banks or for trust funds, in an aggregate market value equal to the amount of the required surety bond; or
(3) an irrevocable letter of credit issued by a financial institution to the amount of the required surety bond.
(d) The surety of any bond may cancel it upon giving 60 days' notice in writing to the office and shall be relieved of liability for any breach of condition occurring after the effective date of cancellation.
(e) In the event of a school closure, the additional security must first be used to destroy any private educational data under section 13.32 left at a physical campus in Minnesota after all other governmental agencies have recovered or retrieved records under their record retention policies. Any remaining funds must then be used to reimburse tuition and fee costs to students that were enrolled at the time of the closure or had withdrawn in the previous 120 calendar days but did not graduate. Priority for refunds will be given to students in the following order:
(1) cash payments made by the student or on behalf of a student;
(2) private student loans; and
(3) Veteran Administration education benefits that are not restored by the Veteran Administration. If there are additional security funds remaining, the additional security funds may be used to cover any administrative costs incurred by the office related to the closure of the school.
2007 c 144 art 3 s 7; 2010 c 364 s 17; 2013 c 99 art 2 s 13; 2017 c 89 art 3 s 5; 2019 c 64 art 2 s 26; 2020 c 109 art 3 s 3
Structure Minnesota Statutes
Chapters 135A - 137 — Postsecondary Education
Chapter 136A — Higher Education
Section 136A.002 — Definitions.
Section 136A.01 — Office Of Higher Education.
Section 136A.03 — Executive Officers; Employees.
Section 136A.031 — Student Advisory Council.
Section 136A.0411 — Collecting Fees.
Section 136A.0412 — Acceptance Of Private Funds; Appropriation.
Section 136A.05 — Cooperation Of Institutions Of Higher Education.
Section 136A.051 — Student Records And Data.
Section 136A.055 — Developmental Education Reporting.
Section 136A.057 — Student Transfer Reporting.
Section 136A.06 — Federal Funds.
Section 136A.091 — Summer Academic Enrichment Program.
Section 136A.095 — Grants-in-aid; Purpose.
Section 136A.096 — Financial Aid Goals.
Section 136A.101 — Definitions.
Section 136A.103 — Institution Eligibility Requirements.
Section 136A.1201 — Minnesota Promise.
Section 136A.121 — State Grant Program.
Section 136A.1215 — Grants For Students With Intellectual And Developmental Disabilities.
Section 136A.123 — Mn Reconnect Program.
Section 136A.1241 — Fostering Independence Higher Education Grants.
Section 136A.125 — Child Care Grants.
Section 136A.126 — Indian Scholarships.
Section 136A.1274 — Underrepresented Student Teacher Grants.
Section 136A.1275 — Student Teacher Grants In Shortage Areas.
Section 136A.1276 — Alternative Teacher Preparation Grant Program.
Section 136A.131 — Accounting And Records.
Section 136A.1311 — Cash Flow.
Section 136A.1312 — Financial Aid Administrator, Professional Judgment.
Section 136A.1313 — Financial Aid Audits.
Section 136A.15 — Definitions.
Section 136A.155 — Additional Institution Eligibility Requirements.
Section 136A.16 — Powers And Duties Of Office.
Section 136A.162 — Classification Of Data.
Section 136A.1701 — Supplemental And Additional Loans.
Section 136A.1702 — Legislative Oversight.
Section 136A.1704 — Student Loan Refinancing.
Section 136A.171 — Revenue Bonds; Issuance; Proceeds.
Section 136A.172 — Negotiable Notes; Issuance; Conditions.
Section 136A.173 — Negotiability; Bond Anticipation Notes; Payment; Conditions.
Section 136A.174 — Security For Bonds.
Section 136A.175 — Refunding Revenue Bonds; Proceeds; Investments.
Section 136A.176 — Bonds Not State Obligations.
Section 136A.177 — Rights Of Bondholders.
Section 136A.178 — Legal Investments; Authorized Securities.
Section 136A.1785 — Loan Capital Fund.
Section 136A.1787 — Self Loan Revenue Bonds Annual Certificate Of Need.
Section 136A.1788 — Student Loan Debt Counseling.
Section 136A.1789 — Aviation Degree Loan Forgiveness Program.
Section 136A.1791 — Teacher Shortage Loan Repayment Program.
Section 136A.1792 — Promotion Of Federal Public Service Loan Forgiveness Programs.
Section 136A.1793 — Promotion Of Teacher Loan Forgiveness Programs.
Section 136A.1794 — Agricultural Education Loan Forgiveness Program.
Section 136A.1795 — Large Animal Veterinarian Loan Forgiveness Program.
Section 136A.1796 — Tribal College Supplemental Grant Assistance.
Section 136A.18 — Legislative Finding, Declaration, And Directive.
Section 136A.23 — Trustees Of Incorporated Colleges May Prescribe Course Of Study; Annual Report.
Section 136A.231 — Education; Postsecondary Students; Work-study Programs.
Section 136A.232 — Administration; Agreements With Educational Facilities.
Section 136A.233 — Work-study Grants.
Section 136A.246 — Dual Training Competency Grants.
Section 136A.26 — Memberships; Officers; Compensation; Removal.
Section 136A.28 — Definitions.
Section 136A.29 — Powers; Duties.
Section 136A.30 — Source Of Payment Of Expenses.
Section 136A.31 — Notes Of The Authority.
Section 136A.32 — Bonds Of The Authority.
Section 136A.33 — Trust Agreement.
Section 136A.34 — Revenue Refunding Bonds.
Section 136A.35 — Bonds Are Not State Obligation.
Section 136A.37 — Remedies Of Bondholders And Trustees.
Section 136A.38 — Bonds Eligible For Investment.
Section 136A.39 — Exemption From Taxes And Other Restrictions.
Section 136A.40 — Administration.
Section 136A.41 — Conflict Of Interest.
Section 136A.42 — Annual Report.
Section 136A.62 — Definitions.
Section 136A.63 — Registration.
Section 136A.64 — Information Required For Registration.
Section 136A.645 — School Closure.
Section 136A.646 — Additional Security.
Section 136A.65 — Approval Of Degrees And Name.
Section 136A.653 — Exemptions.
Section 136A.657 — Exemption; Religious Schools.
Section 136A.658 — Exemption; State Authorization Reciprocity Agreement Schools.
Section 136A.66 — List Of Registered Institutions.
Section 136A.67 — Registration Representations.
Section 136A.672 — Student Complaints.
Section 136A.675 — Risk Analysis.
Section 136A.685 — Private Institutions; Adjudication Of Fraud Or Misrepresentation.
Section 136A.821 — Definitions.
Section 136A.8225 — School Closure.
Section 136A.823 — License Renewal.
Section 136A.825 — Permits For Solicitors.
Section 136A.826 — Information To Students.
Section 136A.828 — Prohibitions.
Section 136A.829 — Revocation Of License Or Permit.
Section 136A.8295 — Student Complaints.
Section 136A.831 — Injunction.
Section 136A.833 — Exemptions.
Section 136A.834 — Exemption; Religious Schools.
Section 136A.861 — Intervention For College Attendance Program Grants.
Section 136A.87 — Planning Information For Postsecondary Education.
Section 136A.901 — Spinal Cord Injury And Traumatic Brain Injury Research Grant Program.
Section 136A.902 — Spinal Cord And Traumatic Brain Injury Advisory Council.