Maryland post-secondary electronic learning programs need surety bonds

electronic learning programs

As of July 1, 2012, Maryland distance electronic learning programs must file post-educational institution surety bonds.

Maryland SB 843 and HB 1223 — which were signed by Gov. Martin O’ Malley on May 22, 2012 — will hold institutions that teach via online courses to the same standards required of all post-secondary institutions under the Secretary of Higher Education. This new bond requirement will help ensure that electronic learning programs uphold all contracts with their students.

This bond was put in place to ensure that students participating in distance learning programs in Maryland will receive the quality education and services they paid for. If the institution fails to uphold its end of the contract, a claim can be filed against the bond, and students will be protected from financial and other losses.

The bond requirement is explained in the following section of SB 843.

“(a) The Commission may require any institution of postsecondary education that is required to obtain a certificate of approval OR REQUIRED TO REGISTER UNDER §11-202.2 OF THIS SUBTITLE to furnish a performance bond or other financial guarantee FOR EITHER THE CERTIFICATE OF APPROVAL OR THE REGISTRATION to the State conditioned that the institution will:

(1) Perform faithfully all agreements or contracts it makes with its students; and

(2) Comply with this article.

(b) Subject to subsection (d)(3)(ii)2 of this section, any bond or guarantee required under this section shall be in the form and amount the Secretary requires.

(c)     (1) The total liability of a surety on a bond or guarantee under this section may not exceed the amount of the bond or guarantee.

(2) If the total amount of claims filed against a bond or guarantee exceeds the amount of the bond or guarantee, the surety shall pay the amount of the bond or guarantee to the secretary for distribution to the claimants.”

Click here to read SB 843 or here to read HB 1123.

Post-educational institution surety bond amounts will be determined by the Secretary of Higher Education, which will consider each institution’s credentials.

If you need to purchase a post educational institution surety bond in Maryland or any other state, contact online via our contact form or by phone at 1 (800) 308-4358 Monday through Friday between 8 a.m. and 7 p.m CST. We offer fast, easy and accurate bonding services to help your institution stay in compliance with your state’s industry regulations.

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