34 Tex. Admin. Code § 7.122 - Definitions
The following words, terms, and phrases, when used in this subchapter, shall have the following meanings:
(1) Accredited out-of-state institution of
higher education--A public or private institution of higher education that:
(A) is located outside this state;
and
(B) is accredited by a
recognized accrediting agency.
(2) Beneficiary--The person designated under
a prepaid tuition contract as the person entitled to apply one or more tuition
units purchased under the contract to the payment of the person's undergraduate
tuition and required fees at a general academic teaching institution, two-year
institution of higher education, private or independent institution of higher
education, medical and dental unit, career school, or accredited out-of-state
institution of higher education.
(3) Board--The Prepaid Higher Education
Tuition Board.
(4) Career school--A
career school or college as defined by Education Code, §
132.001 that offers a
two-year associate degree as approved by the Texas Higher Education
Coordinating Board.
(5) Eligible
educational institution--A general academic teaching institution, two-year
institution of higher education, private or independent institution of higher
education, medical and dental unit, career school, or accredited out-of-state
institution of higher education, that qualify as eligible educational
institutions under Internal Revenue Code, §529.
(6) Enrollment period--The period established
by the board during which a purchaser may enter into a contract with the board
to purchase tuition units. The general enrollment period is September 1 through
the end of February. For beneficiaries who are newborn infants under one year
of age at the time of enrollment, the enrollment period is extended to cover
the period of September 1 through July 31.
(7) First payment due date--The date the
first payment is due after enrolling in the program and establishing a new
prepaid tuition contract. The first payment due date will be specified in the
prepaid tuition contract. The first payment due date serves as the anniversary
date for establishing the three-year holding period. The first payment due date
may be changed subsequently by the board for future enrollment
periods.
(8) Fund--The Texas
Tomorrow Fund II.
(9) General
academic teaching institution--Has the meaning assigned by Education Code,
§
61.003, except that
the term does not include a public state college.
(10) Matriculation--Enrollment as a member of
the student body at an eligible educational institution.
(11) Medical and dental unit, private or
independent institution of higher education, public junior college, public
state college, public technical institute, and recognized accrediting
agency--Have the meanings assigned by Education Code, §
61.003.
(12) Paid in full--All the required payments
for the tuition units and any assessed fees under the prepaid tuition contract
have been received and credited to the account.
(13) Pay-As-You-Go--Purchasing tuition units
at the price in effect for that type of tuition unit on the day payment is
received for the tuition unit. Pay-As-You-Go includes paying for tuition units
with a lump sum payment or multiple lump sum payments, without being obligated
to pay for any additional tuition units.
(14) Plan manager--A professional investment
manager that is under contract with the board to serve as a plan administrator
and to invest the assets of the fund on behalf of the board.
(15) Prepaid tuition contract--A contract
under which a person purchases from the board on behalf of a beneficiary one or
more tuition units that the beneficiary is entitled to apply to the payment of
the beneficiary's undergraduate tuition and required fees at a general academic
teaching institution, two-year institution of higher education, private or
independent institution of higher education, medical and dental unit, career
school, or accredited out-of-state institution of higher education.
(16) Prepayment--Payment of the balance due
or a portion of the balance due under a prepaid tuition contract, ahead of the
schedule provided in the contract.
(17) Program or Plan--The prepaid tuition
unit undergraduate education program. The board may select a different name for
the program or plan for marketing purposes.
(18) Purchaser--A person who enters into a
prepaid tuition contract with the board on behalf of a beneficiary for the
purchase of one or more tuition units.
(19) Redemption--The exchange of one or more
tuition units to pay costs of tuition and required fees at an eligible
educational institution.
(20)
Reduced Refund Value--The lesser of:
(A) the
amount paid by the purchaser or other contributor to purchase any unused
tuition units under the contract ; or
(B) the amount paid by the Purchaser or other
contributor to purchase any unused tuition units to be refunded under the
contract, plus or minus the portion of the total net earnings or losses on
assets of the Plan attributable to that amount.
(21) Refund Value--An amount equal to the
total purchase price of the unused tuition units to be refunded from the
account, plus annual net earnings on the contributions made to the account to
purchase the tuition units that are being refunded (including any negative
returns), with the earnings rate to be set by the board at a rate that is up to
two percent less than the actual investment return for the fund for each of the
years the contract is in effect, provided that in no event shall the annual net
earnings on the contributions ever exceed five percent annually, and provided
further that for any year in which the investment return does not support
payment of any earnings, the board may elect not to credit and pay any earnings
on the contributions, to preserve the actuarial soundness of the fund. Refund
Value shall not be less than Reduced Refund Value that would have been paid if
the Tuition Units had been held for less than three years. Refund Value does
not include any state provided or procured matching contributions or any
earnings on State provided or procured matching contributions.
(22) Required fee--A fee, other than a
laboratory fee for a specific course, that is charged by a public or private
institution of higher education to all students at the institution who are not
exempt from the fee. For purposes of this subdivision, a fee is a required fee
only to the extent that the fee is considered a qualified higher education
expense under Internal Revenue Code, §529. Required fees are generally
those fees imposed on all students as a condition of enrollment. Required fees
do not include fees such as equipment usage fees required for particular
courses, charges for room and board, book costs, or any optional
fees.
(23) Sales period--The year
long period from September 1 through August 31 during which a purchaser who has
established a prepaid tuition contract may make purchases under the contract at
the price(s) established under the contract, or at the price established for
tuition units applicable to the sales period if additional tuition units are
purchased during the sales period.
(24) Three-year holding period--The period of
time that must transpire before a beneficiary or purchaser may redeem a tuition
unit to pay for qualified higher education expenses, as provided under §
7.125(g) of this
title (relating to Redemption of Tuition Units).
(25) Transfer value--The value of the prepaid
tuition contract at the time of transfer, that is the lesser of:
(A) an amount equal to the cost, at the time
of the transfer, of the tuition and required fees that would be covered by
redemption of the number and type of tuition units to be transferred from the
account (but not including any units resulting from any State provided or
procured matching funds) if the beneficiary were redeeming the units at a
general academic teaching institution or two-year institution of higher
education as follows:
(i) for a Type I unit,
at the general academic teaching institution that had the highest tuition and
required fee cost;
(ii) for a Type
II unit, at a general academic teaching institution that had tuition and
required fee cost at the weighted average; and
(iii) for a Type III unit, at a two-year
institution of higher education that had tuition and required fee cost at the
weighted average; or
(B)
an amount equal to the current market value of the unused tuition units to be
transferred from the account, which is an amount equal to the total purchase
price of the unused tuition units to be transferred from the account (but not
including any state provided or procured matching contributions), plus the
portion of the total net earnings on assets of the Fund attributable to that
amount (including any negative returns), but not including any earnings on
state provided or procured matching contributions, as determined by the plan
manager.
(26)
Tuition--The charges imposed by a general academic teaching institution,
two-year institution of higher education, private or independent institution of
higher education, medical and dental unit, career school, or accredited
out-of-state institution of higher education, on undergraduates as a condition
of enrollment, which are identified by such institution as tuition.
(27) Tuition unit--A portion of the cost of
undergraduate resident tuition and required fees that may be prepaid, whose
assigned value, when used to pay the cost of tuition and required fees at an
eligible educational institution, is equal to:
(A) for a Type I tuition unit, one percent of
the cost of undergraduate resident tuition and required fees for one academic
year consisting of 30 semester hours charged by the general academic teaching
institution with the highest such tuition and fee costs for the academic year
in which the unit is redeemed, determined as provided by Education Code, §
54.753(d);
(B) for a Type II tuition unit, one percent
of the weighted average cost of undergraduate resident tuition and required
fees for one academic year consisting of 30 semester hours charged by general
academic teaching institutions for the academic year in which the unit is
redeemed, determined as provided by Education Code, §
54.753(e);
or
(C) for a Type III tuition unit,
one percent of the weighted average cost of undergraduate resident tuition and
required fees for one academic year consisting of 30 semester hours charged by
two-year institutions of higher education for the academic year in which the
unit is redeemed, determined as provided by Education Code, §
54.753(f).
(28) Two-year institution of
higher education--A public junior college, a public state college, and a public
technical institute, as those terms are defined in Education Code, §
61.003.
(29) Weighted average--Has the meaning:
(A) for Type II tuition units, a weighted
average cost for undergraduate resident tuition and required fees of general
academic teaching institutions for the applicable academic year, computed by
the method specified in Education Code, §
54.753(e);
and
(B) for Type III tuition units,
a weighted average cost for undergraduate resident tuition and required fees of
two-year institutions of higher education for the applicable academic year,
computed by the method specified in Education Code, §
54.753(f).
Notes
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