(a) At the time an initial application or application for a branch facility is made for authorization to operate, the executive director shall require the nonpublic postsecondary educational institution making such application to file with the executive director a good and sufficient surety bond in such sum as determined by subsection (b) of this Code section. Such bond shall be executed by the applicant as principal and by a surety company qualified and authorized to do business in this state. The bond shall be conditioned to provide indemnification to the Tuition Guaranty Trust Fund established in Code Section 20-3-250.27 and to any student or enrollee or that person's parent or guardian or class thereof determined to have suffered loss or damage as a result of any act or practice which is a violation of this part or of rules and regulations promulgated pursuant thereto by such nonpublic postsecondary educational institution and that the bonding company shall pay any final, nonappealable judgment rendered by the commission or any court of this state having jurisdiction, upon receipt of written notification thereof. Regardless of the number of years that such bond is in force, the aggregate liability of the surety thereon shall in no event exceed the penal sum of the bond. The bond may be continuous.

(b) The minimum amount of the bond required by subsection (a) of this Code section shall be based on the gross tuition of the nonpublic postsecondary educational institution during the previous year or on the estimated gross tuition for the current year, whichever is larger, and shall be as follows:

Gross Tuition Minimum Bond

$ 0.00 -- $ 50,000.00.....................................… $ 20,000.00

50,001.00 -- 100,000.00....................................… 30,000.00

100,001.00 -- 200,000.00...................................… 50,000.00

200,001.00 -- 300,000.00...................................… 75,000.00

300,001.00 -- 400,000.00...................................… 100,000.00

400,001.00 -- 500,000.00...................................… 150,000.00

500,001.00 and over.........................................… 200,000.00

For situations where a nonpublic postsecondary educational institution is unable to secure a bond amount provided for by this subsection, a bank standby letter of credit secured from a federally insured financial institution shall be accepted pursuant to rules and regulations of the commission.

(c) If the bond filed with the initial application to operate remains in effect, it shall be sufficient when an application is made for the renewal of authorization to operate, unless the amount of the bond must be increased because of increased gross tuition to comply with requirements of subsection (b) of this Code section.

(d) The surety bond to be filed under this Code section shall cover the period of the authorization to operate except when a surety shall be released as provided in this Code section. A surety on any bond filed under this Code section may be released therefrom after such surety shall serve written notice thereof on the executive director at least 90 days prior to such release; but such release shall not discharge or otherwise affect any claim theretofore or thereafter filed by a student or enrollee or that person's parent or guardian or class thereof for loss or damage resulting from any act or practice which is a violation of this part or of rules and regulations promulgated pursuant thereto alleged to have occurred while such bond was in effect or from an institution's ceasing operations during the term for which tuition has been paid while such bond was in force.

(e) Authorization for an institution to operate shall be suspended by operation of law when such institution is no longer covered by a surety bond as required by this Code section, but the executive director shall cause such institution to receive at least 30 days' written notice prior to the release of the surety to the effect that such authorization or permit shall be suspended by operation of law until another surety bond shall be filed in the same manner and like amount as the bond being terminated.