{"data":{"id":"us-ky/krs-165a.360","jurisdiction":"us-ky","citation":"KRS 165A.360","heading":"License -- Bond or other collateral -- Suspension or renewal --","body":"Transferability -- Voidable student contracts.\n(1) (a) No person shall maintain or operate a proprietary school located and doing\nbusiness within this state until the school has b een issued a license by the\ncommission pursuant to the provisions of KRS 165A.310 to 165A.410.\n(b) No person shall maintain or operate a proprietary school located without this\nstate and do business within this state until the school has been issued a\nlicense by the commission pursuant to the provisions of KRS 165A.310 to\n165A.410.\n(c) No license shall be issued by the commission to any proprietary school which\ndenies enrollment to any pupil on account of race, color, or creed. The\nKentucky Commission on Hu man Rights shall have the power to investigate\ndiscriminatory practices of any proprietary school and shall report to the\ncommission. Upon receipt of a report that a school is engaging in\ndiscriminatory practices, the commission shall deny or suspend the l icense of\nthe school in accordance with the provisions of this section and after notice\nand public hearing as required herein.\n(2) No proprietary school shall be issued a license unless it applies, through its officers\nor an owner, upon forms provided by t he commission, and unless the application is\naccompanied by a fee as established by the commission and a good and sufficient\nsurety bond or other collateral in a form approved by the commission, in a penal\nsum of not less than twenty thousand dollars ($20,000).\n(3) (a) The surety bond or other collateral shall be conditioned by the commission to\nrecover all necessary administrative costs, including but not limited to costs:\n1. For the acquisition, permanent filing, and maintenance of student\nrecords of the school;\n2. To provide indemnification to any student or enrollee or his parent or\nguardian suffering loss or damage as a result of any fraud or\nmisrepresentation used in procuring his enrollment or as a result of any\nfraud or misrepresentation as represent ed by the application for the\nlicense; or\n3. As a result of the student being unable to complete the course or courses\nbecause the school ceased operations.\nSuch indemnification shall, in no case, exceed the advanced tuition paid or to\nbe paid by the stud ent or students or any parent or guardian and regardless of\nthe number of years that a school's bond is in force, the aggregate liability of\nthe surety bond shall, in no event, exceed the penal sum of the bond. The\nsurety bond or other collateral may be continuous.\n(b) 1. Any claimant may file with the commission a duly verified claim against\na proprietary school.\n2. The commission shall consider claims in a timely manner after ten (10)\ndays' written notice by certified mail, return receipt requested, to the\nschool cited in the claim, giving the time and place of the hearing.\n3. If the claim is found to be correct and due to the claimant, and if the\ncommission cannot effect a settlement by persuasion and conciliation,\nthe commission shall make a demand upon the principal on the bond or\nother collateral and the surety thereon, and if not paid may bring an\naction on such bond in Franklin Circuit Court.\n(4) A surety on the bond or other collateral may be released after the surety has made a\nwritten notice to the commission at least thirty (30) days prior to the release.\n(5) The surety bond or other collateral shall cover th e period of the license, except\nwhen the surety shall be released in the manner as provided by this section.\n(6) (a) The license shall be suspended by operation of law when the proprietary\nschool is no longer covered by a surety bond or other collateral as  required by\nthis section; but the commission shall cause the proprietary school to receive\nat least ten (10) days' written notice prior to the release of the surety to the\neffect that the approval shall be suspended by operation of law until another\nsurety bond or other collateral is filed in the same manner and like amount as\nrequired for the initial surety bond.\n(b) The license shall be suspended by operation of law at any time any certified\nproprietary school denies enrollment to any pupil, on account of race, color, or\ncreed.\n(7) The application for a license shall be accompanied by such supporting documents as\nthe commission may require. The application and accompanying data shall be\ncertified as true and correct in content and policy by the chief exec utive officer of\nthe proprietary school.\n(8) A license shall be valid for a period of one (1) school year. A license may be\nrenewed in the same manner and under the conditions prescribed by the\ncommission.\n(9) Licenses are transferable to another owner. If  a change of ownership occurs, the\nnew owner shall, within ten (10) days, reexecute and affirm the application for\nlicense and the information therein, governing the license in effect at the time of\nsale. The commission may establish a reasonable fee for t he recording and\nprocessing of such changes.\n(10) The bonding or other collateral requirements herein set forth may be reduced at the\nsole discretion of the commission upon a showing by the proprietary school that\nthey are excessive in the case of any particular proprietary school.\n(11) (a) Contracts by and between a proprietary school operating or doing business\nwithin this state and a student are voidable at the option of the student unless\nthe school has been previously issued a license by the commission.\n(b) No proprietary school operating or doing business within this state shall be\nentitled to any money collected from students, in whatever manner collected,\nunless the school has been previously issued a license by the commission.\n(c) Contracts by and b etween a proprietary school operating or doing business\nwithin this state which are entered into prior to the issuance of a license by the\ncommission, shall be voidable at the option of the student notwithstanding any\nsubsequent issuance of a license to the school by the commission.\n(d) Restitution of any money paid by a student under a contract voided pursuant\nto this section, may be obtained through action brought by the student in either\nDistrict Court or Circuit Court in the county of the student's resi dence or other\nappropriate court, at the option of the student.","path":["KRS Chapter 165A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=49046","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:51:20Z","sha256":"9fbdcb8bba197cb9e3fcace202a53d92f7b61a6ad5f80899dc22eb3eb6885048","source_id":"us-ky","stale":false,"prev":"us-ky/krs-165a.350","next":"us-ky/krs-165a.370"},"notice":"GroundRules: Original legal text. Not legal advice."}