Arizona Summit Law School is not having the best year. The law school is currently on probation with the American Bar Association for its extremely low bar exam passage rates and now it has n been ordered by Arizona’s for-profit-college licensing agency to post a $US1.5 million surety bond in order to guarantee that law students will be able to recoup some of their lost funds if the institution decides to close down.
Administrators at Arizona Summit law school aren’t happy with the decision but the Arizona State Board for Private Postsecondary Education’s deputy directory is adamant. “It’s just to protect the public, just in case,” said Keith Blanchard.
Officials at the law school has told media that the school has no plans to close and is busy preparing for its incoming fall classes and argued before the board that the bond wasn’t necessary and would send a negative message to prospective students
The state board requested the bond because the school was recently put on probation for low passage rates on the State Bar exam. Its sister school under the same ownership, the Charlotte School of Law, is also on probation by the Bar and U.S. Department of Education has announced it was pulling Charlotte’s federal student-loan funding.
Ms Trish Leonard, the state board president, said she “really [felt] a bond [was] required,” likely due to the fact that if Arizona Summit were to suddenly shutter, the state’s Student Tuition Recovery Fund would be completely tapped out. The school’s additional bond would act as further consumer protection and insurance for law students who would otherwise be left between a larger rock and a harder place than they already are if the school were to close.
What Are Surety Bonds ?
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Definition
A surety bond or surety is a promise by a surety or guarantor to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal’s failure to meet the obligation.
A surety bond is defined as a contract among at least three parties:[1]
- the obligee: the party who is the recipient of an obligation
- the principal: the primary party who will perform the contractual obligation
- the surety: who assures the obligee that the principal can perform the task
Source: Wikipedia
