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