(a) Each application for a certificate of approval shall also contain the following commitments:
(1) To conduct the school in accordance with standards, rules and regulations from time to time established by the Department;
(2) To agree to provide a surety company bond for the protection of the contractual rights of students in such form and amount as will meet the approval of the Department and written by a company authorized to do business in this State. Such bonds shall be deposited with the Secretary of State. The amount of the surety bond shall be determined in accordance with subsection (b) of this section, except that in no case shall the surety bond of a business and trade school covered by this chapter be for less than $25,000 per calendar year;
(3) a. As a condition for granting certification, each school must maintain a cancellation and settlement policy which must provide a full refund of all moneys paid by a student if:
1. The student cancels the enrollment agreement or contract within 72 hours (until midnight of the 3rd day excluding Saturdays, Sundays and legal holidays) after the enrollment contract is signed by the prospective student;
2. The enrollment of the student was procured as the result of any misrepresentation in advertising, promotional materials of the school or representations by the owner or representative of the school.
b. As a condition for granting certification, each school must maintain a policy for the refund of the unused portion of tuition, fees and other charges in the event the student, after expiration of the 72-hour cancellation privilege, fails to enter the course, or withdraws or is discontinued therefrom at any time prior to completion, and such policy must provide:
1. Refunds for private business and trade school courses will be based on the period of enrollment computed on the basis of course time expressed in clock hours;
2. The effective date of the termination for refund purposes in private business and trade schools will be the earliest of the following:
A. The last date of attendance, if the student is terminated by the school;
B. The date of receipt of written notice from the student;
C. Ten school days following the last date of attendance;
3. If tuition is collected in advance of entrance, and if, after expiration of the 72-hour cancellation privilege, the student does not enter the private business and trade school, not more than $100 shall be retained by the school;
4. For the student who enters a private business and trade school course of not more than 12 months in length terminates or withdraws, the school may retain $100 of tuition and fees and the minimum refund of the remaining tuition will be:
A. After 0.01 percent enrollment time of the course, 80 percent of the remaining tuition;
B. After 5 percent to 9.9 percent enrollment time of the course, 70 percent of the remaining tuition;
C. After 10 percent to 14.9 percent enrollment time of the course, 60 percent of the remaining tuition;
D. After 15 percent to 24.9 percent enrollment time of the course, 55 percent of the remaining tuition;
E. After 25 percent to 49.9 percent enrollment time of the course, 30 percent of the remaining tuition;
F. After 50 percent or more enrollment time of the course, the student may be considered obligated for the full tuition;
Enrollment time is the time elapsed between the actual starting date and the date of the student’s last day of physical attendance in the school;
5. For private business and trade courses more than 12 months in length, the refund shall be applied to each 12-month period, or part thereof, separately;
6. Refunds of items of extra expense to the student, such as instructional supplies, books, student activities, laboratory fees and service charges, where these items are separately stated and shown in the data furnished the student before enrollment, will be made in a reasonable manner acceptable to the administrator;
7. Refunds based on enrollment in private business and trade schools will be totally consummated within 30 days after the effective date of termination;
8. Refunds for correspondence courses will be computed on the basis of the number of lessons in the course;
9. The effective date of the termination for refund purposes in correspondence courses will be the earliest of the following:
A. The date of notification to the student if the student is terminated;
B. The date of receipt of written notice from the student;
C. The end of the third calendar month following the month in which the student’s last lesson assignment was received unless notification has been received from the student that the student wishes to remain enrolled;
10. If tuition is collected before any lessons have been completed, and if, after expiration of the 72-hour cancellation privilege, the student fails to begin the course, not more than $50 shall be retained by the school;
11. In cases of termination or withdrawal after the student has begun the correspondence course, the school may retain $50 of tuition and fees, and the minimum refund policy must provide that the student will be refunded the pro rata portion of the remaining tuition fees and other charges that the number of lessons completed and serviced by the school bears to the total number of lessons in the course;
12. Refunds based on enrollment in correspondence schools will be totally consummated within 30 days after the effective date of termination.
c. In lieu of the refund policy herein set forth, for programs of instruction not regularly offered to the general public, the Department of Education may, for good cause shown, amend, modify, substitute and/or alter the terms of such policy due to the specialized nature and objective of the subject school’s course of instruction.
d. If a course of instruction is discontinued by the school and this prevents the student from completing the course, all tuition and fees paid are then due and refundable;
(4) Agree that within the 72-hour grace period reserved for cancellation as provided in paragraph (a)(3) of this section, the school will not discount any evidence of indebtedness given by a student applicant, or on an applicant’s behalf, or in any other way place such evidence of indebtedness into the hands of a holder in due course;
(5) To permit the Department to inspect the school or classes thereof from time to time; and to make available to the Department, at any time when required to do so, information pertaining to the activities of the school required for the administration of this chapter;
(6) That all advertising and solicitation will be free from misrepresentation, deception or fraud, and that no fraudulent or deceptive statements shall be made as to possible future employment opportunities or wage expectations.
(b) The amount of the surety bond required of a private business or trade school shall be determined as follows:
(1) The following private business and trade schools shall only be required to post a bond in the amount of $25,000:
a. Schools which only solicit students in the State and which do not receive any revenues for services provided within the State; and
b. Schools which do not receive revenue directly from their students for tuition or any other services. Revenue received by such schools cannot be generated by guaranteed student loans and/or state or federal student grants.
(2) All other private business and trade schools which operate in or from the State, or who render services to students within the State, shall provide a bond in an amount equal to the highest anticipated gross prepaid tuition for students enrolled on any given day in the calendar year for which a certificate of approval is requested. This amount shall include moneys paid by all students regardless of their state of residence.
(3) Surety bonds may only be cancelled during or at the end of any annual term by the bonding agency by giving 45 days’ prior notice in writing by certified mail, return receipt requested, to the Administrator, Private Business and Trade Schools, Vocational Division, State Department of Education, State of Delaware, P.O. Box 1402, Dover, Delaware 19903.
