2011 New Mexico Statutes
Chapter 21: State and Private Education Institutions
Article 23: Post-Secondary Educational Institution Act, 21-23-1 through 21-23-15
Section 21-23-7.1: Surety bond required; alternative surety.

NM Stat § 21-23-7.1 (1996 through 1st Sess 50th Legis) What's This?

21-23-7.1. Surety bond required; alternative surety.

A. A career school licensed by the commission shall post with the commission and maintain in effect a surety bond. The bond shall be payable to the commission and shall be sufficient in amount to indemnify any student damaged as a result of fraud or misrepresentation by a licensed career school or as a result of the career school ceasing operation prior to its students having completed the programs for which they have contracted.

B. The commission is authorized to establish the amount of bond required on an individual basis, taking into consideration factors such as the career school's size, number of students and total income and assets of the career school in the state. In no case shall the bond be less than five thousand dollars ($5,000) nor shall it exceed twenty percent of a career school's gross annual tuition revenue in New Mexico.

C. Surety bonds may be canceled only following delivery of written notice to the commission no less than ninety days prior to the date of cancellation. In case of cancellation, the career school shall provide the commission with a like surety or acceptable alternative in order to maintain licensure.

D. As an alternative to a surety bond, a career school may elect to and the commission may require that a career school establish and maintain a cash deposit escrow account, irrevocable letter of credit or alternative payable to the commission in an amount set by the commission and subject to regulations promulgated by the commission. In no case shall the deposit or account required exceed twenty percent of the career school's gross tuition annual revenue in New Mexico.

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