Back in 2019, the Minnesota state senate passed bill 2415, which dealt with higher education appropriations and policy provisions. Among these provisions were changes to the types of educational institutions that are required to post a surety bond that provides coverage based on the educational program they provide.
What Types of Educational Institutions Were Affected?
Among the types of schools impacted by this new legislation were secondary education institutions, or schools that service students who have achieved a high school diploma. These types of schools can include:
- Public and private universities
- Community colleges
- Trade schools (mechanical, technical, etc.)
- Fire and police academies
As of the passage of the new bill, all schools that meet this criteria are required to obtain a surety bond in order to become or maintain their accreditation, which is required for an institution to grant degrees, use the terms “college” or “university” in their title and receive financial aid from the government. While the Minnesota Office of Higher Education granted leeway to existing institutions, allowing them to continue operations while going through the process of applying, getting approved and obtaining a secondary education surety bond, new schools seeking accreditation will need to obtain a bond before they can begin operations in the state of Minnesota.
This is a change from previous law that only required schools that fell below the state’s minimum financial standards to post a bond. Now, all post-secondary institutions in the state of Minnesota must post a surety bond.
Why the Bonds Are Necessary
Surety bonds for secondary education institutions provide protection for students, guaranteeing certain actions should schools close or violate the state laws that govern them. The main goal of the legislation and the newly required bonds is to protect the personal information of students. Should a school close, money from the surety payout will be used to destroy private educational data and student records. It may also be used for tuition reimbursement. The bonds must be obtained and paid for by the university and are generally equal to 10% of the institution’s revenue from tuition and fees from the prior fiscal year.
Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.