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Utah Senate approves bond requirement to protect students at proprietary postsecondary schools
Summary
The Utah Senate passed Senate Bill 80 to allow the Board of Regents to require bonds from proprietary postsecondary schools sized to advanced tuition and risk; supporters cited past school closures that left students without recourse, while opponents warned of potential conflicts of interest in regulator choice.
The Utah Senate on Jan. 20 passed Senate Bill 80, an amendment to the postsecondary proprietary school act that lets the Board of Regents require a bond from private proprietary schools to cover advanced tuition, fees or equipment costs if a school fails.
Supporters, led by Senator Hilliard, said the measure responds to instances in which proprietary schools closed and students lost prepaid tuition. Hilliard told colleagues the bill allows regulators to set bond amounts proportionate to the risk — factoring advance-payment levels, company history and length in business — rather than imposing a one-size-fits-all requirement.
The bill’s sponsor and supporters emphasized the change is narrowly focused on consumer protection, not on regulating curricula or expanding the Board of Regents’ authority over academic content. "We're not changing any of that," Hilliard said during floor debate, pointing to existing registration and exemption processes.
Opponents raised procedural and oversight concerns. Senator Nielsen said she favored the bill’s intent but opposed vesting bond-setting authority in the Board of Regents, arguing the Board may compete with the private programs it would regulate and that a neutral body — such as professional licensing or consumer affairs — might be preferable.
After questions on retroactivity, fee caps and how bond amounts will be set, the Senate called the question. President Beatty announced the final tally: 24 ayes, 4 nays and 1 absent; the bill will be transmitted to the House for consideration.
The Senate record shows the measure passed to the House for further consideration; the legislation as described in floor debate makes bond amounts contingent on advanced tuition and risk and removes a prior $300 cap on some fees, with agencies to set fees consistent with costs.
What happens next: SB 80 was transmitted to the Utah House for consideration. If enacted as described on the floor, the Board of Regents would adopt bond-setting guidelines; implementation would depend on the Board’s rulemaking and any future amendments.
Sources: Floor statements from Senator Hilliard and Senator Nielsen during the Jan. 20 Senate session.
