Colorado HB 1155 went into effect August 8, 2012, and now requires that some colleges and universities in the state post private school surety bonds as a way to prove financial integrity.

In the event that a school ceases to operate, the bond amount can be used to reimburse students (or their guardians) who paid for tuition and other fees in advance. The state requires that the bond amount be the greater of $5,000 or a reasonable estimate of the maximum prepaid and unearned tuition and fees for the period or term.

Private colleges and universities do not have to file surety bond insurance with the state if:

• it is a party to a performance contract with the commission under section 23-5-129 OR
• it has been accredited for at least 20 years by an accrediting agency that is recognized by the U.S. Department of Education, it has operated continuously in the state for at least 20 years AND it has not filed for bankruptcy protection

Private colleges and universities that do not meet these stipulations must prove their financial integrity, which can be done in one of many ways, including filing a surety bond with the state.

Click here to read HB 1155 in its entirety.

If you need to purchase a private school surety bond in Colorado or another state, you can contact a surety expert online 24/7 or by phone at 1 (800) 308-4358 Monday through Friday between 8 a.m. and 7 p.m. CST.