(1) A school approved by the Higher Education Coordinating Commission to confer any academic degree under ORS § 348.606 shall annually obtain a bond or letter of credit demonstrating that the school is financially sound and capable of fulfilling its commitments to students. A bond or letter of credit must be purchased and maintained by the school for the entire period that the school operates in this state.

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(2)(a) A bond obtained pursuant to this section must be with a corporate surety licensed to do business in this state.

(b) A letter of credit obtained under this section must be an irrevocable letter of credit issued by an insured institution as defined in ORS § 706.008.

(3) The corporate surety for a bond obtained pursuant to this section, or the insured institution for a letter of credit obtained pursuant to this section, must notify the commission if the bond or letter of credit is canceled for any reason. Except as provided in subsection (6) of this section, the surety or institution is liable under the bond or letter of credit until the latest of the following dates:

(a) The date specified in the notice to the commission that the bond or letter of credit is canceled;

(b) The 30th business day after the date the surety or institution mails the notice to the commission that the bond or letter of credit is canceled; or

(c) The date on which the commission receives the notice from the surety or institution that the bond or letter of credit is canceled.

(4) A bond or letter of credit obtained pursuant to this section shall:

(a) Be filed with, and stored by, the commission;

(b) Be executed to the State of Oregon;

(c) Be in an amount, equal to or less than the rolling annual average of prepaid tuition held by the school at any time, calculated by the commission to reimburse students enrolled at the school for tuition paid by the student to the school if the school ceases to provide instruction;

(d) Be in a form approved by the Attorney General; and

(e) Contain as a condition of the bond or letter of credit that the school that is approved by the commission must provide educational services without fraud or fraudulent representation and in compliance with ORS Chapter 348 and any applicable rules adopted by the commission.

(5)(a) In addition to any other remedies provided by law, a student enrolled in a school that is subject to this section shall have a personal right of action against the school, against the surety on the school’s bond and against the letter of credit if the student suffers monetary loss as a result of the school’s failure to provide instruction for which the student has paid tuition.

(b) A student who brings a claim under this subsection may not recover more than the amount of the student’s monetary loss.

(6) The sureties on a bond obtained pursuant to this section, and the issuer of a letter of credit obtained pursuant to this section, are not liable for any action that occurs after the date on which the commission revokes the approval of a school under ORS § 348.612. [2015 c.327 § 2]