Section 61.06. Requirements for surety bonds.

 

(1)   Bond requirement. Before the department issues or renews a license for any school or specialty school, the school or specialty school shall provide the department with a surety bond acceptable to the department and executed by the applicant as principal and by a surety company qualified and authorized to do business in the state of Wisconsin.

(2)   Amount of bonds. The amount of the bond required shall not be less than reflected in table 61.06, and may be increased if the department determines that a larger bond is required to protect students of the school or specialty school, and their parents, guardians, and sponsors from risk of economic loss. A school which exceeds the enrollment upon which its bonding amount is based shall increase the amount of its bond accordingly. The increased bond shall be filed with the department within 30 days of the day the school first exceeds the enrollment on which its bonding amount is based. - See PDF for table

(3)   Conditions of bonds.

(a) The surety bond shall be conditioned to provide indemnification to any student or enrollee of the school or specialty school, or the parent, guardian, or sponsor of such a student or enrollee who suffers any loss or damage as a result of any of the following:

1. Fraud or misrepresentation by the school or specialty school;

2. Violation of any state administrative rule, statute or school policy relating to the licensing or operation of a school or specialty school;

3. A student or enrollee's inability to complete the course or courses of instruction because the school or specialty school failed to perform its contractual obligations to the student or enrollee; or

4. A student or enrollee being refused a tuition refund to which he or she is entitled.

(b) The surety bond shall be conditioned to provide indemnification to the department for the amount of any forfeitures assessed by the department under s. 440.64 , Stats.

(c) In no case shall indemnification to any individual student or enrollee, or the parent, guardian, or sponsor of an individual student or enrollee, be less than the greater of either:

1. The total of the advanced tuition, book fees, supply fees, equipment fees, and administration fees paid by or on behalf of the individual student or enrollee; or,

2. The greater of the total of the student loans owed by the student or enrollee as a consequence of enrolling at the school or specialty school, or the total of the direct costs to the student or enrollee to complete and graduate from an equivalent course of instruction at another school or specialty school chosen by the student or enrollee as a substitute for the school or specialty school.

(d) The aggregate liability of the surety shall not exceed the penal sum of the bond, and the surety bond may be continuous.

(4)   Cancellation of surety bond. A surety on a bond may be released from the bond on 90 days written notice to the secretary of the department. The secretary shall forthwith notify the school or specialty school named as principal on that bond that the school's or specialty school's license shall be suspended if satisfactory evidence of a replacement bond has not been presented within 15 business days of the date of the secretary's notice to the school or specialty school. A school or specialty school which has its license suspended under this subsection shall provide written notice of the suspension and the reason therefor together with the identifying information of the bond from which the surety has sought release to its students and enrollees within 5 days of the suspension, and shall thereupon cease all operations as a school or specialty school under subch. VI of ch. 440 , Stats.

History: Cr. Register, December, 1989, No. 408 , eff. 1-1-90; CR 15-028 : am. (2), (2) Figure (title), (4) Register September 2015 No. 717 , eff. 10-1-15.