IC 21-17-3
    Chapter 3. Postsecondary Proprietary Educational InstitutionAccreditation

IC 21-17-3-1
Purpose
    Sec. 1. The general assembly recognizes that the private school isan essential part of the educational system. It is the purpose of thischapter to protect students, educational institutions, the generalpublic, and honest and ethical operators of private schools fromdishonest and unethical practices.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-2
Accreditation
    Sec. 2. A person may not do business as a postsecondaryproprietary educational institution in Indiana without havingobtained accreditation.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-3
Applications; fee
    Sec. 3. Applications for accreditation must be filed with thecommission and accompanied by an application fee of at least onehundred dollars ($100) for processing the application and evaluatingthe postsecondary proprietary educational institution.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-4
Application; contents
    Sec. 4. The application must include at least the followinginformation:
        (1) The name and address of the postsecondary proprietaryeducational institution and the institution's officers.
        (2) The places where the courses are to be provided.
        (3) The types of courses to be offered, the form of instructionto be followed with the class, shop, or laboratory, and the hoursrequired for each curriculum.
        (4) The form of certificate, diploma, or degree to be awarded.
        (5) A statement of the postsecondary proprietary educationalinstitution's finances.
        (6) A description of the postsecondary proprietary educationalinstitution's physical facilities, including classrooms,laboratories, library, machinery and equipment, toilets, showers,and lavatories.
        (7) An explicit statement of policy with reference to:
            (A) solicitation of students;
            (B) payment and amount of student fees; and
            (C) conditions under which students are entitled to a refundin part or in full of fees paid, including a statement

concerning the existence of the fund.
        (8) Provisions for liability insurance of students.
        (9) Maximum student-teacher ratio to be maintained.
        (10) Minimum requirements for instructional staff.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-5
Application; bond
    Sec. 5. (a) This section is subject to section 6 of this chapter.
    (b) An application must include a surety bond in a penal sumdetermined under section 6 of this chapter. The bond must beexecuted by the applicant as principal and by a surety companyqualified and authorized to do business in Indiana as surety or cashbond.
    (c) The surety bond must be conditioned to provideindemnification to any student or enrollee who suffers a loss ordamage as a result of:
        (1) the failure or neglect of the postsecondary proprietaryeducational institution to faithfully perform all agreements,express or otherwise, with the student, enrollee, one (1) or bothof the parents of the student or enrollee, or a guardian of thestudent or enrollee as represented by the application for theinstitution's accreditation and the materials submitted in supportof that application;
        (2) the failure or neglect of the postsecondary proprietaryeducational institution to maintain and operate a course orcourses of instruction or study in compliance with the standardsof this chapter; or
        (3) an agent's misrepresentation in procuring the student'senrollment.
    (d) A surety on a bond may be released after the surety has madea written notice of the release directed to the commission at leastthirty (30) days before the release. However, a surety may not bereleased from the bond unless all sureties on the bond are released.
    (e) A surety bond covers the period of the accreditation.
    (f) An accreditation shall be suspended if a postsecondaryproprietary educational institution is no longer covered by a suretybond or if the postsecondary proprietary educational institution failsto comply with section 6 of this chapter. The commission shall notifythe postsecondary proprietary educational institution in writing atleast ten (10) days before the release of the surety or sureties that theaccreditation is suspended until another surety bond is filed in themanner and amount required under this chapter.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-6
Bond amount; determination; contributions to fund
    Sec. 6. (a) Subject to subsections (b), (d), and (e), the commissionshall determine the penal sum of each surety bond based upon thefollowing guidelines:        (1) A postsecondary proprietary educational institution that hasno annual gross tuition charges assessed for the previous yearshall secure a surety bond in the amount of twenty-fivethousand dollars ($25,000).
        (2) If at any time the postsecondary proprietary educationalinstitution's projected annual gross tuition charges are morethan two hundred fifty thousand dollars ($250,000), theinstitution shall secure a surety bond in the amount of fiftythousand dollars ($50,000).
    (b) After June 30, 2006, and except as provided in:
        (1) section 9 of this chapter; and
        (2) subsection (e);
and upon the fund achieving at least an initial one million dollar($1,000,000) balance, a postsecondary proprietary educationalinstitution that contributes to the fund when the initial quarterlycontribution is required under this chapter after the fund'sestablishment is not required to make contributions to the fund orsubmit a surety bond.
    (c) The commission shall determine the number of quarterlycontributions required for the fund to initially accumulate onemillion dollars ($1,000,000).
    (d) Except as provided in section 9 of this chapter and subsection(e), a postsecondary proprietary educational institution that beginsmaking contributions to the fund after the initial quarterlycontribution as required under this chapter is required to makecontributions to the fund for the same number of quarters asdetermined by the commission under subsection (c).
    (e) If, after a fund acquires one million dollars ($1,000,000) thebalance in the fund becomes less than five hundred thousand dollars($500,000), all postsecondary proprietary educational institutions notrequired to make contributions to the fund as described in subsection(b) or (d) shall make contributions to the fund for the number ofquarters necessary for the fund to accumulate one million dollars($1,000,000).
As added by P.L.2-2007, SEC.258.

IC 21-17-3-7
Curriculum catalog and promotional brochure; contents
    Sec. 7. The commission shall require each postsecondaryproprietary educational institution to include in each curriculumcatalog and promotional brochure the following:
        (1) A statement indicating that the postsecondary proprietaryeducational institution is regulated by the commission underthis chapter.
        (2) The commission's mailing address and telephone number.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-8
Career college student assurance fund; administration
    Sec. 8. (a) The career college student assurance fund is

established to provide indemnification to a student or an enrollee ofa postsecondary proprietary educational institution who suffers lossor damage as a result of an occurrence described in section 5(c) ofthis chapter if the occurrence transpired after June 30, 1992, and asprovided in section 25 of this chapter.
    (b) The commission shall administer the fund.
    (c) The expenses of administering the fund shall be paid frommoney in the fund.
    (d) The treasurer of state shall invest the money in the fund notcurrently needed to meet the obligations of the fund in the samemanner as other public funds may be invested.
    (e) Money in the fund at the end of a state fiscal year does notrevert to the state general fund but remains available to be used forproviding money for reimbursements allowed under this chapter.
    (f) Upon the fund acquiring fifty thousand dollars ($50,000), thebalance in the fund must not become less than fifty thousand dollars($50,000). If:
        (1) a claim against the fund is filed that would, if paid in full,require the balance of the fund to become less than fiftythousand dollars ($50,000); and
        (2) the commission determines that the student is eligible for areimbursement under the fund;
the commission shall prorate the amount of the reimbursement toensure that the balance of the fund does not become less than fiftythousand dollars ($50,000), and the student is entitled to receive thatbalance of the student's claim from the fund as money becomesavailable in the fund from contributions to the fund required underthis chapter.
    (g) The commission shall ensure that all outstanding claimamounts described in subsection (f) are paid as money in the fundbecomes available in the chronological order of the outstandingclaims.
    (h) A claim against the fund may not be construed to be a debt ofthe state.
As added by P.L.2-2007, SEC.258. Amended by P.L.234-2007,SEC.61.

IC 21-17-3-9
Quarterly contributions to fund; determination; bond
    Sec. 9. (a) Subject to section 6 of this chapter, each postsecondaryproprietary educational institution shall make quarterly contributionsto the fund. The quarters begin January 1, April 1, July 1, andOctober 1.
    (b) For each quarter, each postsecondary proprietary educationalinstitution shall make a contribution equal to the STEP THREEamount derived under the following formula:
        STEP ONE: Determine the total amount of tuition and feesearned during the quarter.
        STEP TWO: Multiply the STEP ONE amount by one-tenth ofone percent (0.1%).        STEP THREE: Add the STEP TWO amount and sixty dollars($60).
    (c) Notwithstanding section 6 of this chapter, for a postsecondaryproprietary educational institution beginning operation afterSeptember 30, 2004, the commission, in addition to requiringcontributions to the fund, shall require the postsecondary proprietaryeducational institution to submit a surety bond in an amountdetermined by the commission for a period that represents thenumber of quarters required for the fund to initially accumulate onemillion dollars ($1,000,000) as determined under section 6(d) of thischapter.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-10
Investigation
    Sec. 10. (a) Upon receipt of an application, the commission shallmake an investigation to determine the accuracy of the statements inthe application to determine if the postsecondary proprietaryeducational institution meets the minimum standards foraccreditation.
    (b) During the investigation under subsection (a), the commissionmay grant a temporary status of accreditation. The temporary statusof accreditation is sufficient to meet the requirements of this chapteruntil a determination on accreditation is made.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-11
Inspection fee
    Sec. 11. The cost of performing a team onsite investigation shallbe paid by the applicant postsecondary proprietary educationalinstitution. However, the total cost of an inspection, including room,board, and mileage that does not require travel outside Indiana, maynot exceed one thousand dollars ($1,000) for any one (1)postsecondary proprietary educational institution.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-12
Student records; contents; surrender to commission
    Sec. 12. (a) A postsecondary proprietary educational institutionshall maintain at least the following records for each student:
        (1) The program in which the student enrolls.
        (2) The length of the program.
        (3) The date of the student's initial enrollment in the program.
        (4) The student's period of attendance.
        (5) The amount of the student's tuition and fees.
        (6) A copy of the enrollment agreement.
    (b) Upon the request of the commission, a postsecondaryproprietary educational institution shall submit the records describedin subsection (a) to the commission.
    (c) If the postsecondary proprietary educational institution ceases

operation, the postsecondary proprietary educational institution shallsubmit the records described in subsection (a) to the commission notlater than thirty (30) days after the institution ceases to operate.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-13
Accreditation standards
    Sec. 13. Full accreditation may not be issued unless and until thecommission finds that the postsecondary proprietary educationalinstitution meets minimum standards that are appropriate to that typeor class of postsecondary proprietary educational institution,including the following minimum standards:
        (1) The postsecondary proprietary educational institution has asound financial structure with sufficient resources for continuedsupport.
        (2) The postsecondary proprietary educational institution hassatisfactory training or educational facilities with sufficienttools, supplies, or equipment and the necessary number of workstations or classrooms to adequately train, instruct, or educatethe number of students enrolled or proposed to be enrolled.
        (3) The postsecondary proprietary educational institution has anadequate number of qualified instructors or teachers,sufficiently trained by experience or education, to give theinstruction, education, or training contemplated.
        (4) The advertising and representations made on behalf of thepostsecondary proprietary educational institution to prospectivestudents are truthful and free from misrepresentation or fraud.
        (5) The charge made for the training, instruction, or educationis clearly stated and based upon the services rendered.
        (6) The premises and conditions under which the students workand study are sanitary, healthful, and safe according to modernstandards.
        (7) The postsecondary proprietary educational institution hasand follows a refund policy approved by the commission.
        (8) The owner or chief administrator of the postsecondaryproprietary educational institution has not been convicted of afelony.
        (9) The owner or chief administrator of the postsecondaryproprietary educational institution has not been the owner orchief administrator of a postsecondary proprietary institutionthat has had its accreditation revoked or has been closedinvoluntarily in the five (5) year period preceding theapplication for accreditation. However, if the owner or chiefadministrator of the postsecondary proprietary educationalinstitution has been the owner or chief administrator of apostsecondary proprietary educational institution that has hadits accreditation revoked or has been closed involuntarily morethan five (5) years before the application for accreditation, thecommission may issue full accreditation at the commission'sdiscretion.As added by P.L.2-2007, SEC.258.

IC 21-17-3-14
Issuance of accreditation
    Sec. 14. (a) After investigation and a finding that the informationin the application is true and the postsecondary proprietaryeducational institution meets the minimum standards, thecommission shall issue an accreditation to the postsecondaryproprietary educational institution upon payment of an additional feeof at least twenty-five dollars ($25).
    (b) The commission may waive inspection of a postsecondaryproprietary educational institution that has been accredited by anaccrediting unit whose standards are approved by the commission asmeeting or exceeding the requirements of this chapter.
    (c) A valid license, approval to operate, or other form ofaccreditation issued to a postsecondary proprietary educationalinstitution by another state may be accepted, instead of inspection,if:
        (1) the requirements of that state meet or exceed therequirements of this chapter; and
        (2) the other state will, in turn, extend reciprocity topostsecondary proprietary educational institutions accredited bythe commission.
    (d) An accreditation issued under this section expires one (1) yearfollowing the accreditation's issuance.
    (e) An accredited postsecondary proprietary educationalinstitution may renew the institution's accreditation annually upon:
        (1) the payment of a fee of at least twenty-five dollars ($25);and
        (2) continued compliance with this chapter.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-15
Revocation
    Sec. 15. Accreditation may be revoked by the commission:
        (1) for cause upon notice and an opportunity for a commissionhearing; and
        (2) for the accredited postsecondary proprietary educationalinstitution failing to make the appropriate quarterlycontributions to the fund not later than forty-five (45) days afterthe end of a quarter.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-16
Hearing
    Sec. 16. (a) A postsecondary proprietary educational institution,after notification that the institution's accreditation has been refused,revoked, or suspended, may apply for a hearing before thecommission concerning the institution's qualifications. Theapplication for a hearing must be filed in writing with the

commission not more than thirty (30) days after receipt of notice ofthe denial, revocation, or suspension.
    (b) The commission shall give a hearing promptly and with notless than ten (10) days notice of the date, time, and place. Thepostsecondary proprietary educational institution is entitled to berepresented by counsel and to offer oral and documentary evidencerelevant to the issue.
    (c) Not more than fifteen (15) days after a hearing, thecommission shall make written findings of fact, a written decision,and a written order based solely on the evidence submitted at thehearing, either granting or denying accreditation to the postsecondaryproprietary educational institution.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-17
Suspension
    Sec. 17. A postsecondary proprietary educational institution'saccreditation shall be suspended at any time if the accreditedpostsecondary proprietary educational institution denies enrollmentto a student or makes a distinction or classification of students on thebasis of race, color, or creed.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-18
Representations
    Sec. 18. A person may not do the following:
        (1) Make, or cause to be made, a statement or representation,oral, written, or visual, in connection with the offering orpublicizing of a course, if the person knows or shouldreasonably know the statement or representation is false,deceptive, substantially inaccurate, or misleading.
        (2) Promise or guarantee employment to a student orprospective student using information, training, or skillpurported to be provided or otherwise enhanced by a course,unless the person offers the student or prospective student abona fide contract of employment agreeing to employ thestudent or prospective student for a period of at least ninety (90)days in a business or other enterprise regularly conducted by theperson in which that information, training, or skill is a normalcondition of employment.
        (3) Do an act that constitutes part of the conduct ofadministration of a course if the person knows, or shouldreasonably know, that the course is being carried on by the useof fraud, deception, or other misrepresentation.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-19
Agent's permits; liability of institution as principal
    Sec. 19. (a) A person representing a postsecondary proprietaryeducational institution doing business in Indiana by offering courses

may not sell a course or solicit students for the institution unless theperson first secures an agent's permit from the commission. If theagent represents more than one (1) postsecondary proprietaryeducational institution, a separate agent's permit must be obtained foreach institution that the agent represents.
    (b) Upon approval of an agent's permit, the commission shall issuea pocket card to the person that includes:
        (1) the person's name and address;
        (2) the name and address of the postsecondary proprietaryeducational institution that the person represents; and
        (3) a statement certifying that the person whose name appearson the card is an authorized agent of the postsecondaryproprietary educational institution.
    (c) The application must be accompanied by a fee of at least tendollars ($10).
    (d) An agent's permit is valid for one (1) year from the date of itsissue. An application for renewal must be accompanied by a fee ofat least ten dollars ($10).
    (e) A postsecondary proprietary educational institution is liablefor the actions of the institution's agents.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-20
Temporary permit
    Sec. 20. (a) An application for an agent's permit must be grantedor denied by the commission not more than fifteen (15) working daysafter the receipt of the application. If the commission has notcompleted a determination with respect to the issuance of a permitunder this section within the fifteen (15) working day period, thecommission shall issue a temporary permit to the applicant. Thetemporary permit is sufficient to meet the requirements of thischapter until a determination is made on the application.
    (b) A permit issued under this chapter may upon ten (10) daysnotice and after a hearing be revoked by the commission:
        (1) if the holder of the permit solicits or enrolls studentsthrough fraud, deception, or misrepresentation; or
        (2) upon a finding that the permit holder is not of good moralcharacter.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-21
Remedy; damages or other relief
    Sec. 21. The fact that a bond is in force or that the fund existsdoes not limit or impair a right of recovery and the amount ofdamages or other relief to which a plaintiff may be entitled.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-22
Remedy; void contracts
    Sec. 22. An obligation, negotiable or nonnegotiable, providing for

payment for a course or courses of instruction is void if thepostsecondary proprietary educational institution is not accredited tooperate in Indiana.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-23
Misrepresentation
    Sec. 23. The issuance of an agent's permit or any accreditationmay not be considered to constitute approval of a course, a person,or an institution. A representation to the contrary is amisrepresentation.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-24
Claims against bond by student for loss or damages; contents;investigation; limitations; claim against balance of fund
    Sec. 24. (a) This section applies to claims against the surety bondof a postsecondary proprietary educational institution.
    (b) A student who believes that the student is suffering loss ordamage resulting from any of the occurrences described in section5(c) of this chapter may request the commission to file a claimagainst the surety of the postsecondary proprietary educationalinstitution or agent.
    (c) The request must state the grounds for the claim and mustinclude material substantiating the claim.
    (d) The commission shall investigate all claims submitted to thecommission and attempt to resolve the claims informally. If thecommission determines that a claim is valid, and an informalresolution cannot be made, the commission shall submit a formalclaim to the surety.
    (e) A claim against the surety bond may not be filed by thecommission unless the student's request under subsection (b) iscommenced not more than five (5) years after the date on which theloss or damage occurred.
    (f) If the amount of the surety bond is insufficient to cover all orpart of the claim, a claim or the balance of the claim against thesurety bond in the amount that is insufficient must be construed to bea claim against the balance of the fund under section 25 of thischapter.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-25
Claims against balance of fund for reimbursement of tuition andfees; determination; priorities
    Sec. 25. (a) This section applies:
        (1) to claims against the balance of the fund; and
        (2) in cases where a student or an enrollee of a postsecondaryproprietary educational institution is protected by both a suretybond and the balance of the fund, only after a claim against thesurety bond exceeds the amount of the surety bond.    (b) A student or an enrollee of a postsecondary proprietaryeducational institution who believes that the student or enrollee hassuffered loss or damage resulting from any of the occurrencesdescribed in section 5(c) of this chapter may request the commissionto file a claim with the commission against the balance of the fund.If there is a surety bond in an amount sufficient to cover a claim orpart of a claim under this section, a claim against the balance of thefund must be construed to be a claim against the surety bond first tothe extent that the amount of the surety bond exists and the balanceof the claim may be filed against the balance of the fund.
    (c) A claim under this section is limited to a refund of theclaimant's applicable tuition and fees.
    (d) All claims must be filed not later than five (5) years after theoccurrence resulting in the loss or damage to the claimant occurs.
    (e) Upon the filing of a claim under this section, the commissionshall review the records submitted by the appropriate postsecondaryproprietary educational institution described under section 12 of thischapter and shall investigate the claim and attempt to resolve theclaim as described in section 24(d) of this chapter.
    (f) Upon a determination by the commission that a claimant shallbe reimbursed under the fund, the commission shall prioritize thereimbursements under the following guidelines:
        (1) A student's educational loan balances.
        (2) Federal grant repayment obligations of the student.
        (3) Other expenses paid directly by the student.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-26
Relief; injunction
    Sec. 26. The prosecuting attorney of the county in which theoffense occurred shall, at the request of the commission or on theprosecuting attorney's own motion, bring any appropriate action,including a mandatory and prohibitive injunction.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-27
Adjudication
    Sec. 27. An action of the commission concerning the issuance,denial, or revocation of a permit or accreditation under this chapteris subject to review under IC 4-21.5.
As added by P.L.2-2007, SEC.258.

IC 21-17-3-28
Violations
    Sec. 28. (a) Except as provided in subsection (b), a person whoknowingly, intentionally, or recklessly violates this chapter commitsa Class B misdemeanor.
    (b) A person who, with intent to defraud, represents the person tobe an agent of a postsecondary proprietary educational institutioncommits a Class C felony.As added by P.L.2-2007, SEC.258.

IC 21-17-3-29
Collection of fees
    Sec. 29. All fees collected by the commission shall be depositedin the state general fund.
As added by P.L.2-2007, SEC.258.