Texas Administrative Code › Title 34 - PUBLIC FINANCE › Part 1 - COMPTROLLER OF PUBLIC ACCOUNTS › Chapter 7 - PREPAID HIGHER EDUCATION TUITION PROGRAM › Subchapter L - PREPAID TUITION UNIT UNDERGRADUATE EDUCATION PROGRAM: TEXAS TOMORROW FUND II › Section 7.135 - Refunds

Current through Reg. 49, No. 28; July 12, 2024
(a) Refunds shall be made in accordance with
				  provisions of this subchapter and the prepaid tuition contract, in a manner
				  that will not adversely affect the tax status of the program under applicable
				  provisions of Internal Revenue Code, §529. Refunds shall be governed by
				  this subchapter as amended and Internal Revenue Code, §529, as in effect
				  on the date the request for refund is submitted to the plan manager.
(b) Earnings may be paid with a refund only
				  if the board determines that such payment will not adversely affect the
				  actuarial soundness of the fund to pay the costs of program administration and
				  operations and to meet the obligations of the program, as provided by Education
				  Code, §
										54.770.
				  It is the board's intent that refund amounts will be based on the definitions
				  of "Refund Value," "Reduced Refund Value," or "Transfer Value," in §
										7.122 of
				  this title (relating to Definitions), as applicable.
(c) The purchaser is entitled to a refund
				  following cancellation or termination of a prepaid tuition contract, subject to
				  any limitations imposed by Internal Revenue Code, §529, this subchapter,
				  and the provisions of the prepaid tuition contract.
(d) Refunds shall be made to the purchaser of
				  the prepaid tuition contract or, in the event of the purchaser's death, the
				  person designated in the enrollment contract or other legal document to have
				  the right of survivorship.
(e)
				  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.
(f) If the prepaid tuition contract is
				  cancelled due to the death or disability of the beneficiary, or due to the
				  receipt of a scholarship by the beneficiary, the purchaser may elect to change
				  the beneficiary or apply for a refund of the Refund Value of the account, less
				  any fees due and payable to the program under the board's fee schedule. The
				  administrative fee will be retained by the program.
(g) If the beneficiary redeems fewer tuition
				  units to pay the cost of tuition and required fees than the number of units
				  purchased on behalf of the beneficiary under a prepaid tuition contract, other
				  than to defer redemption as permitted in accordance with Education Code, §
										54.758,
				  the purchaser may request a refund of the Refund Value of the account, less any
				  fees due and payable under the contract, or transfer the remaining units to
				  another beneficiary in accordance with this subchapter. The administrative fee
				  will be retained by the board.
(h)
				  If the beneficiary decides not to attend an institution of higher education
				  within a reasonable amount of time after graduating from high school, the
				  purchaser may elect to:
(1) change the
				  beneficiary to another eligible beneficiary;
(2) hold the tuition units in the account
				  until the 10th anniversary of the date the beneficiary was projected to
				  graduate from high school, not counting time spent by the beneficiary as an
				  active duty member of the United States armed services; or
(3) cancel the contract and request a refund
				  of the Refund Value of the account, less any fees due and payable to the
				  program. The administrative fee will be retained by the board.