8 CCR 1504-1-IV - [Effective 4/1/2024] APPLICATION FOR CERTIFICATE OF APPROVAL AND SURETY REQUIREMENTS
A. School Name
The complete legal name and location of each school shall be clearly stated in its application for a Certificate of Approval.
B. Parent Corporation Financial Information
A school which is a subsidiary of another corporation shall submit to the Board as a part of the school's application current financial information about the parent corporation including separate financial statements pertinent to the school.
C. Franchise Agreement
A school operating under any form of franchise agreement must file said franchise agreement and all attachments thereto with the Board as a part of its application for a Certificate of Approval. No franchise school shall be approved unless the franchise agreement contains a provision that the franchise shall not be terminated by the franchiser or the franchisee by reason of default or otherwise, until sufficient arrangements, as determined by the Board, shall have first been made to assure the completion of training of students enrolled in said school; and for the appropriate preservation and/or transfer of pertinent school and/or student records to the Division.
D. School Sites
1. Schools under common ownership which offer educational services and maintain ongoing individual facilities, faculty or students shall be considered as independent entities.
2. A school that intends to offer educational services on an intermittent schedule that does not represent a consistent pattern at locations other than the approved school site as described above must notify the Division thirty (30) days prior to each course or other educational service start date. No exterior or interior school emblem/logo is to be displayed at times other than during approved sessions. This notification shall include:
a. Date of educational service and the approved program or stand-alone course to be offered on forms provided by Division staff.
b. Length of stand-alone course or other educational service.
c. Number of students anticipated.
d. Location of facility (complete physical address).
e. Description of facility, including square feet, type of facility, etc.
f. New surety calculation and, if appropriate, a new bond, bond rider, or alternative surety to cover all students regardless of the training location.
This would be classified as a temporary offsite educational offering not to exceed three months and would not require a separate Certificate of Approval. However, this temporary offsite educational offering would fall under the jurisdiction of the school conducting the educational services and that school is responsible for maintaining all Rules and Regulations within the scope of its Certificate of Approval.
3. A separate classroom may be used under special circumstances if the student's education or training benefits from the usage of a separate classroom location due to enhanced or specialized equipment and/or teaching aids. A school that uses a separate classroom must notify the Division using forms provided by the Division. A site visit will be conducted prior to approval.
4. Schools shall make an application for change of location not later than thirty (30) days prior to moving location. The Division shall have authority to approve applications for change of location.
E. Surety Bonds and Surety Bond Alternatives
1. At the time application is made for a Certificate of Approval, or when new programs, stand-alone courses or continuing education courses are added, the applicant shall file with the Division a surety bond or surety alternative which meets the requirements set forth in these Rules. Schools located in Colorado each shall file one bond or alternative covering the school and its agents.
a. A school whose surety value is found by the Board to be insufficient to fund the unearned, prepaid tuition of enrolled students shall be noncompliant with these Rules, and, if, after a period of time determined by the Board from the issuance of a notice of noncompliance, the school has not increased its surety to an acceptable level, it shall be subject to revocation or suspension of its certificate of approval.
b. Pursuant to §§
23-64-119(5), 23-64-121(8), and 23-64-121(10), C.R.S.:
(1) Schools must submit a continuation certificate to the Division no less than fifteen (15) days prior to the renewal date of the bond confirming the next term of coverage.
(2) Schools must submit the following for alternative surety instruments:
(i) Schools that have assigned a certificate of deposit to the Division as a surety bond alternative must submit a bank statement or other acceptable verification from the bank within fifteen (15) days of the maturity date or as requested by the Board. The bank statement must show that the certificate of deposit account remains open, the account number, the amount of the Certificate of Deposit, and the next maturity date/ term.
(ii) Schools that have assigned a savings account to the Division as a surety bond alternative must submit annually, or as requested by the Board, a current bank statement or other acceptable verification from the bank confirming the account remains open. The bank statement must show the savings account number and the balance of the savings account.
(iii) Schools that have assigned an irrevocable letter of credit to the Division as a surety bond alternative must submit verification that the letter of credit requirements are still being met and that the irrevocable letter of credit remains in effect, within fifteen (15) days prior to the expiration date or as requested by the Board. The verification must include the letter of credit number, the amount, and the next expiration date or term, if applicable.
(iv) Schools that have executed a participation contract with a private association, partnership, corporation, or other entity whose membership is comprised of private occupational schools must submit annually, within fifteen (15) days prior to the execution anniversary date, or as requested by the Board, verification that the participation contract is current. The verification must include the amount and the next expiration date or term, if applicable.
2. The bond or alternative-submitted to the Division with an application for a Certificate of Approval shall be in the amount required by §
23-64-121(3), C.R.S. Each application for a Certificate of Approval shall include a bond calculation in the form of a letter signed by an authorized representative of the school showing in detail the calculations made pursuant to §
23-64-121, C.R.S., and explaining the method used for computing the amount of the bond or alternative.
3. In order to be approved by the Board, a surety bond must be:
a. Executed by the applicant and by a surety company authorized to do business in Colorado; and
b. In a form acceptable to the Board; and
c. Conditioned to provide indemnification to any student or enrollee of an in-state or out-of-state school or his/her parent or guardian determined by the Board to have suffered a loss of tuition or any fees as a result of violation of any minimum standard or as a result of a holder of a Certificate of Approval ceasing operation; and
d. A clear, clean electronic copy of an original bond.
4. In lieu of a surety bond, an applicant may file with the Division an assignment of savings account that:
a. Is in a form acceptable to the Board; and
b. Is executed by the applicant; and
c. Is executed by a state or federal savings and loan association, state bank or national bank which is doing business in Colorado and whose accounts are insured by a federal depositor's corporation.
5. In lieu of a surety bond, an applicant may file with the Division a timed certificate of deposit that:
a. Is issued by a state or federal savings and loan association, state bank or national bank which is doing business in Colorado and whose accounts are insured by a federal depositor's corporation;
b. Is either:
(1) Payable to the Division of Private Occupational Schools; or
(2) In the case of negotiable certificate of deposit, is properly assigned without restriction to the Division of Private Occupational Schools; or
(3) In the case of nonnegotiable certificate of deposit, is assigned to the Division of Private Occupational Schools by assignment in a form satisfactory to the Division of Private Occupational Schools.
6. In lieu of a surety bond, an applicant may file with the Division an irrevocable letter of credit that:
a. Is in a form acceptable to the Board; and
b. Conditioned to provide indemnification to any student or enrollee of the school or his/her parent or guardian determined by the Private Occupational School Board to have suffered loss of tuition or any fees as a result of violation of any minimum standard or as a result of a holder of a Certificate of Approval ceasing operation.
c. Is executed by a state or federal savings and loan association, state bank or national bank which is doing business in Colorado and whose accounts are insured by a federal depositor's corporation.
7. In lieu of a surety bond, an applicant may file with the Division of Private Occupational Schools a properly executed participation contract with a private association, partnership, corporation, or other entity whose membership is comprised of private occupational schools, which:
a. Is in a form acceptable to the Board; and
b. Conditioned to provide indemnification to any student or enrollee of the school or his/her parent or guardian determined by the Board to have suffered loss of prepaid tuition or any fees as a result of violation or any minimum standard or as a result of a holder of a Certificate of Approval ceasing operation and provides evidence satisfactory to the Board of its financial ability to provide such indemnification and lists the amount of surety liability the alternative entity will assume.
8. Whenever these Rules require a document to be executed by an applicant the following shall apply:
a. If the application is a corporation, the document must be executed by the president of the corporation or person(s) designated by the corporate Board.
b. If the applicant is a limited liability corporation the document must be executed by the members.
c. If the applicant is a partnership, the document must be executed by all general partners.
d. If the applicant is an individual, the document must be signed by the individual.
e. If the applicant is a state agency, the document must be signed by the Director of that Department.
f. If the applicant is a local government, the document must be signed by the major or Board president.
9. Any bonding alternative entity must have independent financial resources necessary to meet the contractual obligation to the students of a failed member institution.
10. Any bonding alternative entity must have resources equal to or exceeding the maximum bond required of any single school.
11. The Board may make demand on the surety of a school that has ceased operation as authorized in §
23-64-121(5), C.R.S.
a. To the extent that the school's records allow, the Division will provide written notice to students enrolled within two years of the time of the school closure. The notice will be sent to the students' last known address as provided by the school, and the student will have 30 days to request train-out assistance or file a claim with the Board for the student's prorated share of the prepaid, unearned tuition and fees paid by the student, Claims for refund must be accompanied by necessary documentation.
b. After the 30-day notice time has expired, the Division will use the amount of the surety to issue refunds for students' prorated share of the prepaid, unearned tuition and fees paid by the student, or for the implementation of a train-out for the students of the school,
c. If surety exceeds the amount necessary to satisfy Rule IV.E.11.b., the remainder may be retained by the Division within the Colorado Department of Higher Education as reimbursement up to the amount of any actual administrative costs incurred by the division that are associated with the school closure and documented as such.
F. Types of Certificates of Approval
1. Provisional certificate of approval
a. Initial applications may receive a provisional certificate of approval that is effective for more than one (1) year and less than two (2) years.
b. No more than two (2) consecutive provisional certificates of approval will be granted.
2. Standard certificate of approval
a. Upon satisfactory demonstration of school operations during the provisional approval period schools may receive a standard certificate of approval, effective for three (3) years.
3. Application for change of ownership
a. An application for change of ownership and control shall be filed for approval by the Board whenever a change of fifty-one (51) percent or more of the school's equity occurs. The seller, prior to the effective date of the change of ownership, shall notify the Board in writing of the pending sale and submit a roster of students currently enrolled and a detailed written plan outlining the process for transfer of all student records to the new owner. The seller is required to maintain current appropriate Surety and Agents and if applicable to continue to administer and fund student financial aid until new owners are approved by the Board.
b. The buyer shall make application for change of ownership prior to or within thirty (30) days after the change of ownership. Said application shall be made on electronic format as prescribed by the Board and shall include all information and documentation as specified in the application. Failure to do so shall result in the suspension of the school's Certificate of Approval by operation of law until such application has been received and approved by the Board. The Board may review or otherwise treat an application for a change of ownership as an application for a provisional certificate of approval.
c. The Board may review a change of ownership application on a case-by-case basis if after initial review determines that the seller or buyer has circumstances beyond their control that fall outside the Rule as written above.
Notes
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