R765-431-4. Surety Requirements for Institutions 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 Institutions expecting to enroll more than 100 separate individual students (non-duplicated enrollments) during the year it is applying to participate in SARA;

  (b) $125,000 for 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 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 will 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.