OLR Bill Analysis

SB 766

AN ACT CONCERNING LETTERS OF CREDIT FILED BY PRIVATE OCCUPATIONAL SCHOOLS.

SUMMARY:

By law, a new private occupational school must file with the Department of Higher Education (DHE) an irrevocable letter of credit guaranteeing its payments to the Private Occupational School Student Protection Account. This bill (1) increases the amount of the letter of credit from $ 20,000 to $ 40,000; (2) requires that the letter of credit be issued by a bank with a main office or branch in the state; and (3) extends, from eight to 12 years, the period of time for which DHE holds the letter of credit.

EFFECTIVE DATE: July 1, 2009

BACKGROUND

Student Protection Account

This account is used to make tuition refunds to students unable to complete a course at a private occupational school because the school becomes insolvent or ceases operating. It is funded by (1) quarterly assessments on private occupational schools' tuition revenue received from Connecticut students and (2) other fees related to the schools' operations.

Related Bill

sSB 767, reported by the Higher Education and Employment Advancement Committee, prohibits Student Protection Account funds from being used to refund federal student loans if a private occupational school becomes insolvent or ceases operating.

COMMITTEE ACTION

Higher Education and Employment Advancement Committee

Joint Favorable