Code of Vermont Rules › Agency 80 - ADMINISTRATIVE AND ADVISORY AGENCIES › Sub-Agency 270 - VERMONT STUDENT ASSISTANCE CORPORATION › Chapter 001 - REGULATION VSAC 98-2 - VERMONT HIGHER EDUCATION INVESTMENT PLAN › Section 80 270 001 - REGULATION VSAC 98-2 - VERMONT HIGHER EDUCATION INVESTMENT PLAN

Current through June, 2024
Section 1 Purpose
The purpose of this regulation is to establish procedures for
				the operation of the Vermont Higher Education Investment Plan (the "Investment
				Plan"), specify the responsibilities of the Vermont Student Assistance
				Corporation (VSAC) in administering the Investment Plan, describe the rights
				and responsibilities of contributors to the Investment Plan and ensure that the
				Investment Plan conforms with the federal and state statutes and regulations
				governing qualified state tuition programs.
Section 2 Authority
This regulation is issued pursuant to authority vested in VSAC
				by 16 VSA Chapter 87, subchapter 7 (as amended, the "Enabling Act"),
				designating it as the administrator of the Investment Plan. In addition, VSAC,
				as an instrumentality of the state, assumes the authority, functions and
				responsibilities of a qualified state tuition plan under Section 529 of the
				Internal Revenue Code (the "Code"), as amended.
Section 3 Applicability
This regulation affects the responsibilities of the Board of
				Directors of VSAC and its staff, any individual who is a Participant in or
				Beneficiary of the Investment Plan and any third party designated by VSAC to
				carry out services under the Investment Plan.
Section 4 Definitions
Terms defined herein shall be interpreted and construed to be
				compatible with the definitions governing the operation of qualified state
				tuition plans under the Code, as amended. Any terms not explicitly defined
				herein shall have the meanings assigned by the Code.
"Account" means each separate account established as described
				in the Enabling Act and this regulation.
"Beneficiary" means any individual designated by a
				Participation Agreement to receive the benefits thereof.
"Benefits" means the payment of Qualified Post-Secondary
				Education Costs on behalf of a Beneficiary by the Investment Plan.
"Board" means the Board of Directors of the Vermont Student
				Assistance Corporation.
"Contribution" shall have the meaning established in § 529
				of the Internal Revenue Code.
"Corporation" or "VSAC" means Vermont Student Assistance
				Corporation.
"Distribution" means any disbursement from the Investment Plan.
				Distributions include, but are not limited to, tuition credits or certificates,
				payment vouchers, tuition waivers or other similar items. Distributions also
				include, but are not limited to, a refund to the account owner, the Beneficiary
				or the Beneficiary's estate.
"Eligible institution of post-secondary education" means an
				institution so defined by the Internal Revenue Code.
"Internal Revenue Code" or the "Code" means the federal
				Internal Revenue Code of 1986, as amended, together with regulations
				promulgated thereunder.
Parti cipant" means a person, as defined in
				1 V.S.A. §
											128, who
				has entered into a Participation Agreement with the Corporation under the
				Investment Plan for the advance payment of Qualified Post-Secondary Education
				Costs on behalf of a Beneficiary. "Participation Agreement" means an agreement
				between a Participant and the Corporation, pursuant to and conforming with the
				requirements of the Enabling Act, these regulations, the Code and other federal
				statutes, detailing the terms and conditions, in easily understandable terms,
				of participation in the Investment Plan.
"Qualified Post-Secondary Education Costs" means the qualified
				costs of a postsecondary education as defined in the Code.
"Vermont Higher Education Investment Plan" or "Investment Plan"
				means the program created pursuant to the Enabling Act and these
				regulations.
Section 5 Plan
			 Administration and Management
The Board shall establish procedures, which conform with the
				Code, to further implement the Enabling Act and these regulations. Those
				procedures shall govern the operation and management of the Investment Plan by
				the VSAC staff and also the investment of Participant contributions. All
				procedures are to be available for public review and examination by the
				Investment Plan Participants. The Board shall insure that the actions it takes
				regarding the Investment Plan, and those taken by the VSAC staff, shall be in
				the best interests of the Investment Plan's Participants. Furthermore, the
				Board shall require a separate accounting for each Beneficiary and shall
				annually establish a limitation on the total assets that can be held in a
				Beneficiary's account(s) for the payment of necessary Qualified Post-Secondary
				Education Costs.
Section 6
			 Participation Agreements
Parti cipation Agreements shall specify the rights and
				responsibilities of the Investment Plan Participants, Beneficiaries and VSAC.
				They shall be written, presented and organized in such a way as to be easily
				understandable to the general public as required by the Enabling Act. The
				Participation Agreement shall stipulate the terms and conditions under which
				deposits can be made in and disbursements can be made from the Investment Plan
				and fully disclose the penalty for the withdrawal of deposits for non-qualified
				purposes. The Participation Agreement also shall clearly and prominently
				disclose any risks associated with depositing monies with the Corporation and
				any insurance provided by the Corporation. The Participation Agreement shall
				state that no interest in the Investment Plan or any portion thereof shall be
				used as security for a loan. All Participation Agreements shall conform to the
				requirements of Vermont law and the Code.
Section 7 Investment Options
The Board shall offer at least two different investment options
				from which prospective Participants can choose at the time of their enrollment
				in the Investment Plan. The options shall be clearly described to all persons
				considering participation in the Investment Plan. The benefits and risks of
				each option of the Investment Plan are to be explained in the Participation
				Agreement, prior to enrollment. Other than selecting one or more investment
				options at enrollment, Participants shall not self-direct the investment of
				their funds in the Investment Plan except in accordance with the Code.
Section 8 Plan participation
Any person is eligible to become a Participant, regardless of
				place of residence.
Section
			 9 Tax treatment of earnings from the plan
Income earned or received from the Investment Plan for the
				account of any Participant or Beneficiary shall not be subject to Vermont
				income tax to the extent that the assets and income of the account are
				maintained, accrued and expended in accordance with the requirements of the
				Investment Plan, the Enabling Act and the applicable provisions of the
				Code.
Section 10
			 Severability
If any provision of this regulation, or the application of it
				to any person or circumstance, is determined to be invalid by a court of
				competent jurisdiction, such invalidity shall not affect other provisions of
				this regulation which can be given effect without the invalid provision or
				application, and to that end, the provisions of this regulation are
				severable.
Section 11
			 Effective date
This regulation shall be effective August 15,
				2001.
AUTHORITY: 16 V.S.A. Chapter 87 SubC.
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