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AB 164

Revises provisions relating to the Account for Student Indemnification. (BDR 34-544)

2025 Regular Session

Raises the Account for Student Indemnification threshold to $750,000, suspending the $5 per-new-student fee while funded, then resumes if below $750k.

Approved by the Governor. Chapter 74.
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Bill Summary · AB 164

AB 164 — Summary (Chapter 74, 2025)

Purpose

AB 164 amends Nevada law governing the Account for Student Indemnification to raise the account balance threshold at which licensed postsecondary institutions are exempted from paying a quarterly per‑student fee. The change is intended to strengthen the indemnification fund that protects students harmed by sudden school closures or statutory violations.

Key provisions

  • Amends NRS 394.557 to change the account threshold:
    • Replaces the existing $250,000 balance trigger with $750,000.
    • If the Account for Student Indemnification has a balance of $750,000 or more, postsecondary institutions licensed by the Commission on Postsecondary Education (CPE) are not required to pay the $5 fee for each new student’s initial enrollment (the fee is normally paid quarterly).
    • If the balance later falls below $750,000, institutions must resume paying the fee until the balance again reaches $750,000.
  • Effective date: July 1, 2025.
  • The bill does not alter other statutory rules governing the Account (NRS 394.553), including permitted uses of the fund (indemnifying students after closures or statutory violations), limits on investigative expenditures, a $10,000 minimum balance floor, interest crediting, and that the Account does not lapse to the General Fund.

Background and rationale

  • The indemnification Account was created in 1995 and the $250,000 threshold had not been increased since inception.
  • The Commission on Postsecondary Education documented a 2024 institutional closure (CCNN) that generated approximately $530,000 in verified indemnification/refund claims for about 50 claims; some claims remained unpaid while the Account balance was insufficient. That event and rising tuition/costs were cited as reasons to increase the threshold so the fund can better meet potential future obligations.
  • The $5 fee is collected once per newly enrolled student in the quarter they first enroll and is credited to the Account.

Who is affected

  • Postsecondary educational institutions licensed by the Nevada Commission on Postsecondary Education (primarily private career/technical and other non‑public institutions): they may be exempt from paying the $5 per‑new‑student fee while the Account balance is at or above $750,000.
  • Current and prospective students: the change aims to maintain a stronger indemnification fund to protect students in the event of abrupt institutional closures or certain regulatory violations.
  • The CPE Administrator: continues to administer notifications to institutions about the Account balance and fee suspension/resumption.

Fiscal and administrative impact

  • Legislative documents indicate no fiscal effect on state or local government (no fiscal note required).
  • Administrative duties remain: the Administrator must notify institutions when the Account reaches or falls below the trigger amount.

Legislative status / timeline

  • Introduced / prefiled in January 2025 (sponsored by Assemblymember O’Neill).
  • Passed both houses in spring 2025.
  • Enrolled and delivered to the Governor May 27, 2025.
  • Approved by the Governor and filed as Chapter 74 on May 28, 2025.
  • Becomes effective July 1, 2025.

Statutory references

  • Amends: NRS 394.557 (fee and notification provisions).
  • Related statute governing the Account: NRS 394.553 (Account uses and administration).

Compiled from official sources — confirm details with the bill’s official record.

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