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1 | AN ACT concerning education.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Prepaid Tuition Act is amended by | ||||||
5 | changing Sections 5 and 45 as follows:
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6 | (110 ILCS 979/5)
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7 | Sec. 5. Purpose. The General Assembly finds and declares | ||||||
8 | that the
general welfare and security of the State are enhanced | ||||||
9 | by access to higher
education for all residents of the State | ||||||
10 | who desire that education and who
demonstrate the | ||||||
11 | qualifications necessary to pursue that education.
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12 | Furthermore, it is desirable that residents of the State who | ||||||
13 | seek to pursue
higher education be able to choose attendance at | ||||||
14 | the higher education
institution that offers programs and | ||||||
15 | services most suitable to their needs.
Accordingly, endeavors | ||||||
16 | that serve the higher education needs of the people of
the | ||||||
17 | State represent an essential function of State government.
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18 | During the past decade, students have been paying more and | ||||||
19 | borrowing more to
finance the increasing cost of higher | ||||||
20 | education at Illinois colleges and
universities as well as at | ||||||
21 | similar institutions nationwide.
Federal and state | ||||||
22 | governments' capacity to fund college scholarships and
grants | ||||||
23 | cannot fully meet the current and future demand for higher |
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1 | education nor
is it reasonable to expect that paying for | ||||||
2 | college is solely a governmental
responsibility. It is -- and | ||||||
3 | has always been -- a shared responsibility among
the student, | ||||||
4 | the family, State government, and the federal government.
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5 | Consequently, the intent of this Act is to both encourage and
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6 | better enable Illinois families to help themselves finance the | ||||||
7 | cost of higher
education, specifically through a program that | ||||||
8 | provides Illinois families with
a method of State tax-free and | ||||||
9 | federally tax-exempt
tax-deferred savings for higher education
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10 | college
tuition .
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11 | (Source: P.A. 90-546, eff. 12-1-97.)
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12 | (110 ILCS 979/45)
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13 | Sec. 45. Illinois prepaid tuition contracts.
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14 | (a) The Commission may enter into an Illinois prepaid | ||||||
15 | tuition contract with
a purchaser under which the Commission | ||||||
16 | contracts on behalf of the State to pay
full tuition and | ||||||
17 | mandatory fees at an Illinois public university or Illinois
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18 | community college for a qualified beneficiary to attend the
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19 | MAP-eligible institution to which the qualified beneficiary is | ||||||
20 | admitted. Each
contract shall contain terms, conditions, and | ||||||
21 | provisions that the Commission
determines to be necessary for | ||||||
22 | ensuring the educational objectives and
sustainable financial | ||||||
23 | viability of the Illinois prepaid tuition program.
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24 | (b) Each contract shall have one designated purchaser and | ||||||
25 | one designated
qualified beneficiary. Unless otherwise |
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1 | specified in the contract, the
purchaser
owns the contract and | ||||||
2 | retains any tax liability for its assets only until the
first | ||||||
3 | distribution of benefits. Once a partial benefit of the | ||||||
4 | contract has
been disbursed, any tax liability attributable to | ||||||
5 | the contract and its assets
becomes a tax liability of the | ||||||
6 | qualified beneficiary, unless otherwise
specified in the | ||||||
7 | contract. Contracts shall be purchased in units of 15 credit
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8 | hours at any MAP-eligible institution.
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9 | (c) Without exception, benefits may be received by a | ||||||
10 | qualified beneficiary
of an Illinois prepaid tuition contract | ||||||
11 | no earlier than 3 years from the date
the contract is | ||||||
12 | purchased.
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13 | (d) A prepaid tuition contract shall contain, but is not | ||||||
14 | limited to,
provisions for (i) refunds or withdrawals in | ||||||
15 | certain circumstances, with or
without interest or penalties;
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16 | (ii) conversion of the contract at the time of distribution | ||||||
17 | from accrued
prepayment value at one type of MAP-eligible | ||||||
18 | institution to the accrued
prepayment value at a different type | ||||||
19 | of MAP-eligible institution; (iii)
portability of the accrued | ||||||
20 | value of the prepayment value for use at an
out-of-state higher | ||||||
21 | education institution; (iv) transferability of the contract
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22 | benefits within the qualified beneficiary's immediate family; | ||||||
23 | and (v) a
specified benefit period during which the contract | ||||||
24 | may be redeemed.
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25 | (e) Each Illinois prepaid tuition contract also shall | ||||||
26 | contain, at minimum,
all of
the following:
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1 | (1) The amount of payment or payments and the number of | ||||||
2 | payments required
from a purchaser on behalf of a qualified | ||||||
3 | beneficiary.
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4 | (2) The terms and conditions under which purchasers | ||||||
5 | shall remit payments,
including, but not limited to, the | ||||||
6 | date or dates upon which each payment shall
be due.
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7 | (3) Provisions for late payment charges and for | ||||||
8 | default.
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9 | (4) Provisions for penalty fees payable incident to an | ||||||
10 | authorized
withdrawal.
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11 | (5) The name, date of birth, and social security number | ||||||
12 | of the qualified
beneficiary on whose behalf the contract | ||||||
13 | is drawn and the terms and conditions
under which the | ||||||
14 | contract may be transferred to another qualified | ||||||
15 | beneficiary.
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16 | (6) The name and social security number of any person | ||||||
17 | who may
terminate the contract, together with terms that | ||||||
18 | specify whether the contract
may be terminated by the
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19 | purchaser, the qualified beneficiary, a specific | ||||||
20 | designated person, or any
combination of these persons.
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21 | (7) The terms and conditions under which a contract may | ||||||
22 | be terminated, the
name and social security number of the | ||||||
23 | person entitled to any refund due as a
result of the | ||||||
24 | termination of the contract pursuant to those terms and
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25 | conditions,
and the method for determining the amount of a | ||||||
26 | refund.
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1 | (8) The time limitations, if any, within which the | ||||||
2 | qualified beneficiary
must claim his or her benefits | ||||||
3 | through the program.
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4 | (9) Other terms and conditions determined by the | ||||||
5 | Commission to be
appropriate.
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6 | (f) In addition to the contract provisions set forth in | ||||||
7 | subsection (e), each
Illinois prepaid tuition contract shall | ||||||
8 | include:
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9 | (1) The number of credit hours contracted by the | ||||||
10 | purchaser.
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11 | (2) The type of MAP-eligible institution and the | ||||||
12 | prepaid tuition plan
toward which the credit hours shall be | ||||||
13 | applied.
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14 | (3) The explicit contractual obligation of the | ||||||
15 | Commission to the qualified
beneficiary to provide a | ||||||
16 | specific number of credit hours of undergraduate
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17 | instruction at a MAP-eligible institution, not to exceed | ||||||
18 | the maximum number of
credit hours required for the | ||||||
19 | conference of a degree that corresponds to the
plan | ||||||
20 | purchased on behalf of the qualified beneficiary.
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21 | (g) The Commission shall indicate by rule the conditions | ||||||
22 | under which refunds
are payable to a contract purchaser. | ||||||
23 | Generally, no refund shall exceed the
amount paid into the | ||||||
24 | Illinois Prepaid Tuition Trust Fund by the purchaser. In
the | ||||||
25 | event that a contract is converted from a Public University | ||||||
26 | Plan described
in subsection (j) of this Section to a Community |
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1 | College Plan described in
subsection (k) of this Section, the | ||||||
2 | refund amount shall be reduced
by the amount transferred to the | ||||||
3 | Illinois community college on behalf of the
qualified | ||||||
4 | beneficiary. Except where the Commission may otherwise rule, | ||||||
5 | refunds
may exceed the amount paid into the Illinois Prepaid | ||||||
6 | Tuition Trust Fund only
under the following circumstances:
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7 | (1) If the qualified beneficiary is awarded a grant or | ||||||
8 | scholarship at a
public institution of higher education, | ||||||
9 | the
terms of
which duplicate the benefits included in the | ||||||
10 | Illinois prepaid tuition contract,
then moneys paid for the | ||||||
11 | purchase of the contract shall be returned to the
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12 | purchaser, upon request, in semester installments that | ||||||
13 | coincide with the
matriculation by the
qualified | ||||||
14 | beneficiary, in an amount equal to the current cost
of | ||||||
15 | tuition
and mandatory fees at the MAP-eligible institution | ||||||
16 | where the qualified
beneficiary is enrolled.
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17 | (1.5) If the qualified beneficiary is awarded a grant | ||||||
18 | or scholarship
while enrolled at either a MAP-eligible | ||||||
19 | nonpublic institution of higher
education or an eligible | ||||||
20 | public or private out-of-state higher education
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21 | institution, the terms of which duplicate the benefits | ||||||
22 | included in the
Illinois prepaid tuition contract, then | ||||||
23 | money paid for the purchase of the
contract shall be | ||||||
24 | returned to the purchaser, upon request, in semester
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25 | installments that coincide with the matriculation by the | ||||||
26 | qualified
beneficiary. The amount paid shall not exceed the |
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1 | current average
mean-weighted credit hour value of the | ||||||
2 | registration fees purchased
under the contract.
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3 | (2) In the event of the death or total disability of | ||||||
4 | the qualified
beneficiary, moneys paid for the purchase of | ||||||
5 | the Illinois prepaid tuition
contract shall be returned to | ||||||
6 | the purchaser together with all accrued earnings.
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7 | (3) If an Illinois prepaid tuition contract is | ||||||
8 | converted from a Public
University Plan to a Community | ||||||
9 | College Plan, then the amount refunded shall be
the value | ||||||
10 | of the original Illinois prepaid tuition contract minus the | ||||||
11 | value of
the contract after conversion.
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12 | No refund shall be authorized under an Illinois prepaid | ||||||
13 | tuition contract for
any semester partially attended but not | ||||||
14 | completed.
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15 | The Commission, by rule, shall set forth specific | ||||||
16 | procedures for
making contract payments in conjunction with | ||||||
17 | grants and scholarships awarded to
contract beneficiaries.
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18 | Moneys paid into or out of the Illinois Prepaid Tuition | ||||||
19 | Trust Fund by or on
behalf of the purchaser or the qualified | ||||||
20 | beneficiary of an Illinois prepaid
tuition contract are exempt | ||||||
21 | from all claims of creditors of the purchaser or
beneficiary, | ||||||
22 | so long as the contract has not been terminated.
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23 | The State or any State agency, county, municipality, or | ||||||
24 | other political
subdivision, by contract or collective | ||||||
25 | bargaining agreement, may agree with any
employee to remit | ||||||
26 | payments toward the purchase of Illinois
prepaid tuition |
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1 | contracts through payroll deductions made by the appropriate
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2 | officer or officers of the entity making the payments. Such | ||||||
3 | payments shall be
held and administered in accordance with this | ||||||
4 | Act.
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5 | (h) Nothing in this Act shall be construed as a promise or | ||||||
6 | guarantee that a
qualified beneficiary will be admitted to a | ||||||
7 | MAP-eligible institution or to a
particular MAP-eligible | ||||||
8 | institution, will be allowed to continue enrollment at
a | ||||||
9 | MAP-eligible institution after admission, or will be graduated | ||||||
10 | from a
MAP-eligible institution.
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11 | (i) The Commission shall develop and make prepaid tuition | ||||||
12 | contracts
available under a minimum of at least 2 independent | ||||||
13 | plans to be known as the
Public University Plan and the | ||||||
14 | Community College Plan.
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15 | Contracts shall be purchased in units of 15 credit hours at | ||||||
16 | either an
Illinois public university or an Illinois community | ||||||
17 | college.
The minimum purchase amount per qualified beneficiary | ||||||
18 | shall be one unit or 15
credit hours. The maximum purchase | ||||||
19 | amount shall be 9 units (or 135 credit
hours) for the Public | ||||||
20 | University Plan and 4 units (or 60 credit hours) for the
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21 | Community College Plan.
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22 | (j) Public University Plan. Through the Public University | ||||||
23 | Plan, the
Illinois prepaid tuition contract shall provide | ||||||
24 | prepaid registration fees,
which include full tuition costs as | ||||||
25 | well as mandatory fees, for a specified
number of undergraduate | ||||||
26 | credit hours, not to exceed the maximum number of
credit hours |
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1 | required for the conference of a baccalaureate degree. In
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2 | determining the cost of participation in the Public University | ||||||
3 | Plan, the
Commission shall reference the combined | ||||||
4 | mean-weighted current registration fees
from all Illinois | ||||||
5 | public universities.
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6 | In the event that a qualified beneficiary for whatever | ||||||
7 | reason chooses to
attend an Illinois community college, the | ||||||
8 | qualified beneficiary may convert the
average number of credit | ||||||
9 | hours required for the conference of an associate
degree from | ||||||
10 | the Public University Plan to the Community College
Plan and | ||||||
11 | may retain the remaining Public University Plan credit hours or | ||||||
12 | may
request a refund for prepaid credit hours in excess of | ||||||
13 | those required for
conference of an associate degree. In | ||||||
14 | determining the amount of any refund,
the Commission also shall | ||||||
15 | recognize the current relative credit hour cost of
the 2 plans | ||||||
16 | when making any conversion.
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17 | Qualified beneficiaries shall bear the cost of any | ||||||
18 | laboratory or other
non-mandatory fees associated with | ||||||
19 | enrollment in specific courses. Qualified
beneficiaries who | ||||||
20 | are not Illinois residents shall bear the difference in
cost | ||||||
21 | between in-state registration fees guaranteed by the prepaid | ||||||
22 | tuition
contract and tuition and other charges assessed upon | ||||||
23 | out-of-state students by
the MAP-eligible institution.
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24 | (k) Community College Plan. Through the Community College | ||||||
25 | Plan, the
Illinois prepaid tuition contract shall provide | ||||||
26 | prepaid registration fees,
which include full tuition costs as |
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1 | well as mandatory fees, for a specified
number of undergraduate | ||||||
2 | credit hours, not to exceed the maximum number of
credit hours | ||||||
3 | required for the conference of an associate degree. In
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4 | determining the cost of participation in the Community College | ||||||
5 | Plan, the
Commission shall reference the combined | ||||||
6 | mean-weighted current registration fees
from all Illinois | ||||||
7 | community colleges.
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8 | In the event that a qualified beneficiary for whatever | ||||||
9 | reason chooses to
attend an Illinois public university, the | ||||||
10 | qualified beneficiary's prepaid
tuition contract shall be | ||||||
11 | converted for use at that Illinois public university
by | ||||||
12 | referencing the current average mean-weighted credit hour | ||||||
13 | value of
registration fees at Illinois community colleges | ||||||
14 | relative to the corresponding
value of registration fees at | ||||||
15 | Illinois public universities.
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16 | Qualified beneficiaries shall bear the cost of any | ||||||
17 | laboratory or other
non-mandatory fees associated with | ||||||
18 | enrollment in specific courses. Qualified
beneficiaries who | ||||||
19 | are not Illinois residents shall bear the difference in
cost | ||||||
20 | between in-state registration fees guaranteed by the prepaid | ||||||
21 | tuition
contract and tuition and other charges assessed upon | ||||||
22 | out-of-state students by
the MAP-eligible institution.
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23 | (l) A qualified beneficiary may apply the benefits of any | ||||||
24 | Illinois prepaid
tuition contract toward a nonpublic | ||||||
25 | institution of higher education. In the
event that a qualified | ||||||
26 | beneficiary for whatever reason chooses to attend a
nonpublic |
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1 | institution of higher education, the qualified beneficiary's | ||||||
2 | prepaid
tuition contract shall be converted for use at that | ||||||
3 | nonpublic institution of
higher education by referencing the | ||||||
4 | current average mean-weighted credit hour
value of | ||||||
5 | registration fees purchased under the
contract. The Commission | ||||||
6 | shall
transfer, or cause to have transferred, this amount, less | ||||||
7 | a transfer fee, to
the nonpublic institution on behalf of the | ||||||
8 | beneficiary. In the event that the
cost of registration charged | ||||||
9 | to the beneficiary at the nonpublic institution of
higher | ||||||
10 | education is less than the aggregate value of the Illinois | ||||||
11 | prepaid
tuition contract, any remaining amount shall be | ||||||
12 | transferred in subsequent
semesters until the transfer value is | ||||||
13 | fully depleted.
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14 | (m) A qualified beneficiary may apply the benefits of any | ||||||
15 | Illinois prepaid
tuition contract toward an eligible | ||||||
16 | out-of-state college or university.
Institutional eligibility | ||||||
17 | for out-of-state colleges and universities shall be
determined | ||||||
18 | by the Commission, but in making those determinations the | ||||||
19 | Commission
shall recognize that the benefits of an Illinois | ||||||
20 | prepaid tuition contract may
not be used at any postsecondary | ||||||
21 | educational institution that is both operated
for-profit and | ||||||
22 | located outside of Illinois.
In the
event that a qualified | ||||||
23 | beneficiary for whatever reason chooses to attend an
eligible | ||||||
24 | out-of-state college or university, the qualified | ||||||
25 | beneficiary's
prepaid tuition contract shall be converted for | ||||||
26 | use at that college or
university by referencing the current |
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1 | average mean-weighted credit hour value
of registration fees | ||||||
2 | purchased under the contract. The Commission shall
transfer, or | ||||||
3 | cause to have
transferred, this amount, less a transfer fee, to | ||||||
4 | the college or university on
behalf of the beneficiary. In the | ||||||
5 | event that the cost of registration charged
to the beneficiary | ||||||
6 | at the eligible out-of-state college or university is less
than | ||||||
7 | the aggregate value of the Illinois prepaid tuition contract, | ||||||
8 | any
remaining amount shall be transferred in subsequent | ||||||
9 | semesters until the
transfer value is fully depleted.
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10 | (n) Illinois prepaid tuition contracts may be purchased | ||||||
11 | either by lump sum
or by installments. No penalty shall be | ||||||
12 | assessed for early
payment of installment contracts.
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13 | (o) The Commission shall annually adjust the price of new | ||||||
14 | contracts, in
accordance with the annual changes in | ||||||
15 | registration fees at Illinois public
universities and | ||||||
16 | community colleges.
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17 | (Source: P.A. 92-165, eff. 7-26-01; 93-56, eff. 7-1-03.)
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18 | Section 99. Effective date. This Act takes effect upon | ||||||
19 | becoming law.
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