Wisconsin Administrative Code
Department of Safety and Professional Services
SPS 400 - Educational Approval
Chapter SPS 404 - Approval Of Schools
Section SPS 404.06 - Financial stability and student protection

(a) As a condition of obtaining and retaining approval, a school shall provide a surety bond on a form specified by the department. Except as provided in pars. (b) and (c), the amount of surety shall be the lesser of $25,000 or 125% of unearned tuition.

(b) No surety bond may be less than $1,000 or an amount equal to $2,000 for each representative the school employs.

(c) The bonding requirements set forth in this section may be reduced upon a determination that they are excessive in relation to the risk of economic loss to which Wisconsin residents are exposed in the case of any particular school, based upon evidence of a stable fiscal history, satisfactory completion and placement rates, accreditation by a recognized accrediting body or other stability criteria the schools may offer for department review.

(d) The bond shall be executed by the school as principal and by a surety company qualified and authorized to do business in the state of Wisconsin as a surety.

(e) A surety on a bond may be released after the surety has provided written notice directed to the department at least 30 days prior to the release.

(a) Except as provided under par. (e), in addition to the fees under s. SPS 404.10, a school shall pay a student protection fee.

(b) The fee shall be established as follows.

(c) The fee shall paid at the same time the school makes its second payment annual renewal fee as required under s. SPS 404.10(2) (d) and is due no later than March 1 of the calendar year for which the school is applying for renewal.

(d) A school that makes the student protection fee payment required after March 1, shall pay for each month or part of a month the payment is late, a late fee of $50 or 1.5% of the student protection fee payment, whichever is greater.

(e) The department shall discontinue collecting student protection fees under this subsection during the period that the balance of the appropriation under s. 20.165(1) (jr), Stats., exceeds $1,000,000.

(a) The department may use a surety bond on which it has collected to provide indemnification to any student, parent, guardian, or sponsor suffering loss or damage as a result of the following.

(b) Indemnification under this section may not exceed the advanced tuition, book fees, supply fees, or equipment fees paid or liable to be paid for regardless of the number of years that a school's bond is in force. The aggregate liability of the surety bond may not exceed the penal sum of the bond. The surety bond may be continuous.

(c) To the extent that the surety bond is unable to fully cover the losses incurred by a student, parent, guardian, or sponsor when a school closes, the department may authorize the full or partial payment of those losses from the student protection appropriation under s. 20.165(1) (jr), Stats.

(d) The department may use a surety bond on which is has collected or funds from the student protection appropriation to arrange for a teach-out of students.