Mich. Admin. Code R. 390.1808 - Terminations and refunds under 1988 community college plan contracts

Rule 8.

(1) As used in this rule:

(a) "Annual tuition cost" means a figure determined by dividing the total in-district tuition collected by a particular community or junior college for a year for credit hour courses by the total number of in-district fiscal year equated students at that particular school for that year.

(b) "Average tuition" means a figure determined by adding the annual tuition cost at each community or junior college and dividing that result by the total number of community or junior colleges.

(c) "Contract" means a community college plan contract issued during 1988.

(d) "Fiscal year equated students" means a figure determined for each community or junior college by dividing 1/2 of the number of credit hours necessary to receive a 2-year associate degree at that community or junior college into the number of credit hours for which in-district students were enrolled.

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

(f) "Lowest tuition cost" means the lowest annual tuition rate charged at any community or junior college.

(g) "Mandatory fee" means any fee, other than charges for credit hours, room, and board, which a community or junior college requires all students to pay.

(h) "Weighted average tuition cost" means the figure arrived at as follows:

(i) First, multiply the annual tuition cost at each community or junior college by its total number of fiscal year equated students.

(ii) Second, add the results of paragraph (i) of this subdivision for all community or junior colleges.

(iii) Third, divide the result of paragraph (ii) of this subdivision by the total number of fiscal year equated students for all community or junior colleges.

(2) A contract may be terminated in the following instances upon a written request to the trust by the beneficiary or by a person who has legal authority to act on behalf of a beneficiary who has died or is disabled:

(a) The beneficiary has reached 18 years of age or has received a high school diploma and certifies that he or she will do 1 of the following:

(i) Attend a state institution of higher education or an independent, degree-granting college or university.

(ii) Attend an out-of-state institution of higher education.

(iii) Attend a community or junior college or higher education institution where he or she has received a full-tuition scholarship.

(b) The beneficiary has died or is disabled.

(c) The beneficiary has reached 18 years of age or has received a high school diploma and certifies that he or she will not attend a community or junior college or a higher education institution.

(d) The board approves a termination for any other reason.

(3) The amount of the refund for a contract terminated pursuant to the provisions of subrule (2) of this rule shall be as follows:

(a) If the contract is terminated pursuant to the provisions of subrule (2)(a) of this rule, the refund shall be the sum of 2 annual installment payments. Each installment shall be determined annually as follows:

(i) If the beneficiary directs payment of the annual installment to a state institution of higher education or an independent, degree-granting college or university, an amount equal to 1/2 of the weighted average tuition cost based upon the last full academic year before refund payments commence for the number of academic years covered by the contract, less the termination fee.

(ii) If the beneficiary directs payment of the annual installment to an out-of-state institution of higher education or if the beneficiary will attend a community or junior college or higher education institution in the academic year under a full-tuition scholarship, an amount equal to 1/2 of the average tuition based upon the last full academic year before refund payments commence for the number of academic years covered by the contract, less the termination fee.

(iii) For beneficiaries not covered by the provisions of paragraph (i) or (ii) of this subdivision, an amount equal to 1/2 of the lowest tuition cost based upon the last full academic year before refund payments commence for the number of years covered by the contract, less the termination fee.

(iv) If the sum of the installments under the provisions of paragraphs (i) to (iii) of this subdivision is more or less than that sum determined with installments based upon the academic year in which refund payments commenced, the difference, if any, shall be added to or subtracted from the second year's installment.

(b) If the contract is terminated pursuant to the provisions of subrule (2)(b), (c), or (d) of this rule, the refund shall be 1/2 of the lowest tuition cost based upon the last full academic year before the refund payments commence, and for the number of academic years covered by the contract, less the termination fee.

(c) A refund shall not be less than the prepaid tuition amount.

(4) Refunds under the provisions of subrule (3) of this rule shall be made according to the following schedule:

(a) A refund for a termination allowed under the provisions of subrule (2)(a), (c), or (d) of this rule shall be made in 2 annual installments as follows:

(i) If an annual installment is directed to be paid to the higher education institution, the annual installment shall be paid as necessary to cover the tuition charges of the higher education institution. Any remaining annual installment amounts in excess of the tuition charges for the academic year shall be returned at the end of the academic year to the person specified in the contract.

(ii) If payment is directed to other than a higher education institution, the annual installment will be paid not later than August 15 of each year.

(iii) Any refund amount due under the provisions of subrule (3)(c) of this rule which is remaining on August 15 of the second year following the last full academic year before the refund commences shall be refunded to the person specified in the contract.

(b) A refund for a termination allowed under the provisions of subrule (2)(b) of this rule shall be paid in a lump sum within 60 days after the trust's approval of the requested termination.

(5) If educational benefits have been received under the contract before the contract is terminated, the refund pursuant to the provisions of subrule (3) of this rule shall be reduced by the amount transferred to a community or junior college to pay for tuition charges for the beneficiary. This reduction shall be divided equally between the 2 annual installments.

(6) If a contract is paid for, in whole or in part, from the proceeds of a secured loan and the trust is required to pay a refund because the contract is terminated due to the death or disability of the beneficiary, termination by the trust for fraud, or termination by the trust due to actuarial unsoundness, the refund shall be reduced by the amount required to pay off the secured loan, any early withdrawal fee, and the trust's expenses for processing payment on the secured loan.

(7) A beneficiary who requests a refund, except for a refund pursuant to a termination under the provisions of subrule (2)(b) of this rule, shall give the trust written notice by July 15 before the academic year in which the refund payments are to commence. The notice shall be received or postmarked by July 15 or the trust may postpone the commencement of the refund.

Notes

Mich. Admin. Code R. 390.1808

1992 AACS