Mich. Admin. Code R. 390.1801 - Definitions

Rule 1.

(1) As used in these rules:

(a) "Academic year" means the undergraduate school year consisting of 2 semesters or 3 terms or quarters beginning the first semester, term, or quarter after July 15 of any year.

(b) "Act" means 1986 PA 316, MCL 390.1421 et seq.

(c) "Annual undergraduate tuition cost" means a figure determined by dividing the total in-state, undergraduate tuition collected by a particular state institution of higher education for a year by the total number of in-state, undergraduate, fiscal year equated students at that particular school for that year.

(d) "Application" means a request for acceptance into the trust made on a form, or a duplicate of a form, approved by the trust.

(e) "Application fee" means a fee paid to the trust upon application.

(f) "Average tuition cost" means a figure determined by adding the annual undergraduate tuition cost at each state institution of higher education and dividing that result by the total number of state institutions of higher education.

(g) "Beneficiary" means an individual who is designated as a beneficiary in a contract with the trust. The beneficiary shall be a resident as defined in this rule when the contract is submitted to the trust.

(h) "Community or junior college" means an educational institution described in 1963 Mich. Const., Art. VIII, section 7.

(i) "Contract" means any 1 of the following Michigan education trust contracts:

(i) Full benefits plan contract offered in 1988.

(ii) Limited benefits plan contract offered in 1988.

(iii) Community college plan contract offered in 1988.

(iv) Any other contract to provide educational benefits approved by the board.

(j) "Contract processing fee" means a fee paid for the processing of a contract.

(k) "Disabled" or "disability" means a limitation of an individual's learning ability that results from an injury or disease which renders the individual incapable of participating in higher education.

(l) "Escrow account" means an account called an escrow account in any contract.

(m) "Higher education institution" means a public educational institution, an independent, degree-granting college or university, or an out-of-state institution of higher education.

(n) "Immediate family" has 1 of the following meanings:

(i) For contracts issued in the years 1988 to 1996, the term means any of the following:

(A) The purchaser or any of the following relations of the purchaser:

(1) A spouse.

(2) A child.

(3) A stepchild.

(4) An adopted child.

(5) A grandchild.

(6) A niece or nephew.

(7) A ward.

(B) Any of the following relations of the beneficiary:

(1) A brother or sister.

(2) A stepbrother or stepsister.

(3) A cousin of the first degree.

(4) A mother or father.

(C) Another person designated by the board to be a member of the immediate family.

(ii) For contracts issued after the year 1996, the term means any of the following relations of the beneficiary:

(A) A spouse.

(B) A mother or father.

(C) A brother or sister.

(D) A legally adopted brother or sister.

(E) A child.

(F) A legally adopted child.

(G) A spouse's child.

(H) A niece or nephew.

(I) A cousin of the first degree.

(o) "Independent, degree-granting college or university" means either of the following:

(i) For contracts issued in the years 1988 to 1996, the term means a nonpublic, associate or baccalaureate degree-granting institution of higher education approved by the state board of education and located in this state.

(ii) For contracts issued after the year 1996, the term means a nonprofit, nonpublic, associate or baccalaureate degree-granting institution of higher education approved by the state board of education and located in this state.

(p) "In-district tuition rate" means the tuition rate charged a student who meets the in-district residency requirements established by a particular community or junior college.

(q) "In-state tuition rate" means the tuition rate charged a student who meets the in-state residency requirements of a particular state institution of higher education.

(r) "Item" means any of the categories listed and numbered on the signature page of a contract.

(s) "Lowest tuition cost" means the lowest annual tuition rate charged freshmen, sophomores, juniors, or seniors among all annual tuition rates at any state institution of higher education.

(t) "Mandatory fee" means any fee, other than charges for credit hours, room, and board, which an educational institution requires all students to pay.

(u) "New beneficiary" means an individual who is an immediate family member to whom contract rights have been transferred.

(v) "Out-of-state institution of higher education" means 1 of the following:

(i) A nonprofit, baccalaureate degree-granting college or university located outside this state.

(ii) A proprietary baccalaureate degree-granting college or university located outside this state that is eligible to participate in United States department of education student aid programs.

(iii) A community or junior college located outside this state that is eligible to participate in United States department of education student aid programs.

(w) "Person" means an individual who is a resident of the United States or a partnership, trust, association, corporation, or governmental subdivision organized or existing under the laws of the United States or any state of the United States.

(x) "Plan" means any group of contracts so identified by the trust as a plan.

(y) "Prepaid tuition amount" means the dollar amount paid for a contract, but does not include an application fee and any contract processing fee set forth in the contract.

(z) "Public educational institution" means a state institution of higher education or a community or junior college.

(aa) "Purchaser" means the person designated in a contract who makes, or is obligated to make, advance tuition payments pursuant to a contract. The purchaser, if a natural person, shall be 18 years of age or older or a trustee or a designated custodian under the provisions of 1959 PA 172, MCL 554.451 et seq., or be represented by a court-appointed or approved conservator or guardian.

(bb) "Resident" means an individual who is domiciled in, or whose state of legal residence is, this state.

(cc) "Secured loan" means a single-purpose installment payment loan made by a third-party lender to a purchaser for the purpose of making the total contract price.

(dd) "Termination" means a discontinuance of the right to receive educational benefits under the contract.

(ee) "Third-party lender" means a savings institution, bank, credit union, or other party which is under contract with the trust to offer secured loans for the purchase of contracts.

(ff) "Third-party servicer" means a savings institution, bank, credit union, or other party under contract with the trust to service the receipt of contracts and contract payments.

(gg) "Total contract price" means the amount paid for a contract, including any contract processing fee set forth in the contract, but not including an application fee.

(hh) "Transfer" means moving all or a portion of the contract rights from the beneficiary to a new beneficiary.

(ii) "Tuition account" means an account established by the trust in the advance tuition payment fund to hold all monies to provide educational benefits or refunds for plan contracts. This account shall not be subject to a claim for payment by a third-party lender.

(jj) "Tuition charges" means the undergraduate quarter, term, semester, or trimester charges imposed to attend a higher education institution, including mandatory fees.

(kk) "Undergraduate fiscal year equated students" means a figure determined for each state institution of higher education by dividing 1/4 of the number of credit hours necessary to receive a 4-year baccalaureate degree at that state institution of higher education into the number of credit hours for which in-state undergraduate students were enrolled.

(2) Terms defined in the act have the same meanings when used in these rules.

Notes

Mich. Admin. Code R. 390.1801

1992 AACS; 1997 AACS; 1998-2000 AACS; 2002 AACS; 2003 AACS