Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 7 - PREPAID HIGHER EDUCATION TUITION PROGRAM › Subchapter I - REFUNDS, TERMINATION › Section 7.81 - Refunds

Current through Reg. 49, No. 28; July 12, 2024
(a) Refunds shall be made in accordance with
				  provisions of these rules and the prepaid tuition contract, in a manner that
				  will not adversely affect the tax status of the program under applicable
				  provisions of the Internal Revenue Code, as amended from time to time. Refunds
				  shall be governed by these rules as amended and as in effect on the date the
				  request for refund is submitted to the board. The amount of any refund shall be
				  the sum of all payments made under the contract for tuition and required fees,
				  less fees due and payable to the program under the board's fee schedule and
				  less any amounts paid by the program pursuant to the prepaid tuition contract
				  prior to the refund.
(b) Refunds
				  shall be made to the purchaser of the prepaid tuition contract unless otherwise
				  designated by the purchaser in writing to the board in the event of the
				  purchaser's death.
(c) Should a
				  beneficiary terminate his/her student status on or after the date on which the
				  institution denies refunds to students withdrawing for a particular semester,
				  no refund shall be paid under the prepaid tuition contract for amounts relating
				  to such semester.
(d) Examples of
				  circumstances under these rules in which refunds may be made include, but are
				  not limited to, the following.
(1) Under any
				  plan if the beneficiary receives a full scholarship for tuition and required
				  fees, the amount of tuition and required fees that would have been paid under
				  the plan selected may be refunded. Under a junior college plan, junior/senior
				  college plan, or a senior college plan, the amount of such refund shall not
				  exceed the tuition scholarship amount. Refund payments may be issued each
				  academic term as long as the scholarship is effective. The purchaser of the
				  prepaid tuition contract shall be entitled to such refund. Proof of scholarship
				  must be submitted in a form acceptable to the board.
(2) Under the junior college plan,
				  junior/senior college plan or senior college plan, if a beneficiary receives a
				  partial scholarship for tuition and required fees, the tuition scholarship
				  amount may be refunded. Under the private college plan, if a beneficiary
				  receives a partial scholarship, a refund may be made in an amount equal to the
				  excess of the estimated average private tuition and required fee amounts, over
				  the actual tuition and required fee amounts less the scholarship amount. Refund
				  payments up to the amount determined in accordance with this paragraph may be
				  issued each academic term as long as the scholarship is effective. The
				  purchaser of the prepaid tuition contract shall be entitled to such refund.
				  Proof of scholarship must be submitted in a form acceptable to the
				  board.
(3) If the beneficiary dies
				  or becomes disabled while attending an institution of higher education or a
				  private or independent institution of higher education, the amount of benefits
				  remaining available under the prepaid tuition contract, less any applicable
				  fees, may be refunded. A lump sum refund may be made within 60 days of the date
				  the program is notified of the death or disability to the purchaser of the
				  prepaid tuition contract, provided proof of death or disability is submitted in
				  a form acceptable to the board.
(4)
				  If the beneficiary dies or becomes disabled after having graduated from high
				  school but prior to attending an institution of higher education or a private
				  or independent institution of higher education, a refund may be issued or the
				  benefits under such contract may be transferred to another qualified
				  beneficiary. If a change of beneficiary is not requested, a lump sum refund may
				  be made within 60 days of the date the program is notified of the death or
				  disability to the purchaser of the prepaid tuition contract, provided proof of
				  death or disability is submitted in a form acceptable to the board. Under the
				  junior college plan, junior/senior college plan, or senior college plan, the
				  refund will equal the average amount of tuition and required fees in effect at
				  the time the refund is requested. Under the private college plan, the refund
				  will equal the estimated average of private tuition and required fees as
				  determined annually by the board.
(5) If the beneficiary dies or becomes
				  disabled before the contract is paid in full, a refund may be issued or the
				  benefits under such contract may be transferred to another qualified
				  beneficiary. If a change of beneficiary is not requested, a lump sum refund may
				  be made within 60 days of the date the program is notified of the death or
				  disability to the purchaser of the prepaid tuition contract, provided proof of
				  death or disability is submitted in a form acceptable to the board. For junior
				  college plans, junior/senior college plans, or senior college plans, the refund
				  amount will be equal to a pro rata amount of the average amount of tuition and
				  required fees in effect at the time the refund is requested, such pro rata
				  amount determined by the number of payments made under the contract by the
				  purchaser to the number of payments required to pay the contract in full. For
				  private college plans, the refund amount will be equal to a pro rata amount of
				  the estimated amount of private tuition and required fees set forth in the
				  prepaid tuition contract, such pro rata amount determined by the number of
				  payments made under the contract by the purchaser to the number of payments
				  required to pay the contract in full.
(6) If a prepaid tuition contract is
				  terminated under §
											7.82(c)
				  of this title (relating to Termination of Prepaid Tuition Contract), such
				  contract may be refunded in an amount equal to the present lump sum actuarial
				  value, as of the date of termination, of the average amount of tuition or the
				  estimated amount of private tuition and required fees of junior college plans,
				  junior/senior college plans or the estimated amount of private tuition and
				  required fees for the private college plan, less a cancellation fee; and any
				  other applicable fee. In no case shall a refund be made in an amount less than
				  the total amount paid by the purchaser under the contract less any applicable
				  administrative fees or amounts previously distributed.
(7) If the purchaser who selected the junior
				  college plan, junior/senior college plan, or senior college plan dies or
				  becomes disabled and payments cease before the contract is paid in full, and
				  unless otherwise directed by the purchaser in writing, a refund may be made.
				  The refund amount will be equal to a percentage of the average amount of
				  tuition and required fees in effect at the time the refund is requested,
				  determined by reference to the percentage of payments made under the contract
				  by the purchaser. If the purchaser who selected the private college plan dies
				  or becomes disabled and payments cease before the contract is paid in full, a
				  refund may be made. The refund amount will be equal to a percentage of the
				  estimated amount of private tuition and required fees set forth in the prepaid
				  tuition contract, determined by reference to the percentage of payments made
				  under the contract by the purchaser. A lump sum refund may be made within 60
				  days to the purchaser of the prepaid tuition contract unless otherwise
				  specified in writing by the purchaser as described in this paragraph. In the
				  alternative, contract benefits may be converted to a plan with reduced
				  benefits. Proof of death or disability shall be in a form acceptable to the
				  board. Notwithstanding any other provision of this paragraph, the purchaser, in
				  a writing to the board, and providing such other information as the board may
				  request, may designate a person who shall have a right of survivorship with
				  respect to purchaser's rights and obligations pursuant to a prepaid tuition
				  contract; provided that such designation shall in no way affect the purchaser's
				  ability to modify or terminate the contract and receive a refund without the
				  consent or authorization of the designee.
(8) Refunds may be made for other reasons as
				  approved by the board. By way of example, such refunds may be made in an amount
				  equal to the lowest amount of tuition and required fees of all institutions
				  under the plan selected, less a cancellation fee. Refund payments may be made
				  in semiannual installments to the purchaser of the prepaid tuition
				  contract.