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| Public Act 095-0217 |
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AN ACT concerning education.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Illinois Prepaid Tuition Act is amended by | ||||
changing Sections 5 and 45 as follows:
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(110 ILCS 979/5)
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Sec. 5. Purpose. The General Assembly finds and declares | ||||
that the
general welfare and security of the State are enhanced | ||||
by access to higher
education for all residents of the State | ||||
who desire that education and who
demonstrate the | ||||
qualifications necessary to pursue that education.
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Furthermore, it is desirable that residents of the State who | ||||
seek to pursue
higher education be able to choose attendance at | ||||
the higher education
institution that offers programs and | ||||
services most suitable to their needs.
Accordingly, endeavors | ||||
that serve the higher education needs of the people of
the | ||||
State represent an essential function of State government.
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During the past decade, students have been paying more and | ||||
borrowing more to
finance the increasing cost of higher | ||||
education at Illinois colleges and
universities as well as at | ||||
similar institutions nationwide.
Federal and state | ||||
governments' capacity to fund college scholarships and
grants | ||||
cannot fully meet the current and future demand for higher | ||||
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
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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 | ||
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
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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 | ||
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
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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
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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
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installments that coincide with the matriculation by the | ||
qualified
beneficiary. The amount paid shall not exceed the | ||
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 | ||
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 | ||
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 | ||
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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