Need a Refund?
You can receive a
Request a Refund:
For all units held at least three years (and for contracts cancelled due to the Beneficiary’s death, disability, receipt of scholarship or admission to a U.S. Military Academy), the Purchaser will receive the Refund Value, which is an amount equal to the price you paid for the unit plus or minus adjusted net investment earnings or losses on that amount, with the earnings rate set annually by the Board at a rate that is up to 2% less than the actual net earnings, is capped at 5%, and is net of any fees due and payable. The earnings portion of a Refund is also subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may apply. Earnings may only be paid on a refund subject to the actuarial soundness of the fund. Refund Value does not include any state-provided or procured matching contributions or earnings thereon.
For units that do not meet the three-year holding period requirement, the Purchaser will receive the Reduced Refund Value. It will be limited to the lesser of (1) the price you paid for the unit, or (2) the price you paid for the unit, plus or minus net investment earnings or losses on that amount, and is net of any fees due and payable. This means the Reduced Refund Value will not include any positive net earnings, but can be less than the purchase price if there have been periods of negative returns in the market. Reduced Refund Value does not include any state-provided or procured matching contributions or earnings thereon.
for the following reasons:
- If the Benficiary: The person designated by the Purchaser under a Prepaid Tuition Contract as the person for whom undergraduate tuition and required fees will be paid to an Eligible Educational Institution when authorized by the Purchaser. chooses not to attend college or receives a scholarship.
- In the event of the Beneficiary’s death or disability.
- If the contract is terminated due to misrepresentation regarding Residency: Residency means domicile within the State of Texas at the time the Purchaser enters into a Contract. or age.
- Failure to provide required information or default in payment.
- If you don’t want or need the contract any longer.
The earnings portion of a Refund, if any, is subject to the actuarial soundness of the Plan and is subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may apply. Refund Value does not include any state-provided or procured matching contributions or earnings thereon. See page 20 of the Plan Description and Master Agreement for more information on the taxation of refunds.
Refunds may also be given to accounts where the Purchaser: The person who establishes the Contract for a specified Beneficiary. There can only be one Purchaser for each Contract. The Purchaser is responsible for making payments in a timely manner and is the only person who may direct or receive refunds, or may direct rollovers, Contract changes, and changes in the designated Beneficiary except that the Contract may be cancelled or modified by the Plan. Friends and family who contribute to another person’s account are not the Purchaser and may not prevent, direct or receive refunds, and may not direct rollovers, contract changes, or changes in the designated Beneficiary. ends up with excess units after the Benficiary: The person designated by the Purchaser under a Prepaid Tuition Contract as the person for whom undergraduate tuition and required fees will be paid to an Eligible Educational Institution when authorized by the Purchaser. graduates, and the Purchaser chooses not to transfer the units to a newly qualified Beneficiary or to another 529 Plan: A 529 plan is an education savings plan operated by a state or an educational institution and designed to help families set aside funds for college. It is named after Section 529 of the internal revenue code, which authorized these types of tax-advantaged savings plans in 1996. Earnings on 529 plans are tax-free if used for qualified higher education expenses. (Unqualified withdrawals may be taxable as ordinary income and subject to a 10% federal tax penalty.) The Pension Protection Act of 2006 made the tax-free character of 529s a permanent part of federal law.
The contract will automatically terminate 10 years after the Beneficiary’s projected high school graduation date.
The Refund Process
You can cancel or terminate a contract at any time and for any reason and receive a
Request a Refund:
For all units held at least three years (and for contracts cancelled due to the Beneficiary’s death, disability, receipt of scholarship or admission to a U.S. Military Academy), the Purchaser will receive the Refund Value, which is an amount equal to the price you paid for the unit plus or minus adjusted net investment earnings or losses on that amount, with the earnings rate set annually by the Board at a rate that is up to 2% less than the actual net earnings, is capped at 5%, and is net of any fees due and payable. The earnings portion of a Refund is also subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may apply. Earnings may only be paid on a refund subject to the actuarial soundness of the fund. Refund Value does not include any state-provided or procured matching contributions or earnings thereon.
For units that do not meet the three-year holding period requirement, the Purchaser will receive the Reduced Refund Value. It will be limited to the lesser of (1) the price you paid for the unit, or (2) the price you paid for the unit, plus or minus net investment earnings or losses on that amount, and is net of any fees due and payable. This means the Reduced Refund Value will not include any positive net earnings, but can be less than the purchase price if there have been periods of negative returns in the market. Reduced Refund Value does not include any state-provided or procured matching contributions or earnings thereon.
The value of the
Request a Refund:
For all units held at least three years (and for contracts cancelled due to the Beneficiary’s death, disability, receipt of scholarship or admission to a U.S. Military Academy), the Purchaser will receive the Refund Value, which is an amount equal to the price you paid for the unit plus or minus adjusted net investment earnings or losses on that amount, with the earnings rate set annually by the Board at a rate that is up to 2% less than the actual net earnings, is capped at 5%, and is net of any fees due and payable. The earnings portion of a Refund is also subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may apply. Earnings may only be paid on a refund subject to the actuarial soundness of the fund. Refund Value does not include any state-provided or procured matching contributions or earnings thereon.
For units that do not meet the three-year holding period requirement, the Purchaser will receive the Reduced Refund Value. It will be limited to the lesser of (1) the price you paid for the unit, or (2) the price you paid for the unit, plus or minus net investment earnings or losses on that amount, and is net of any fees due and payable. This means the Reduced Refund Value will not include any positive net earnings, but can be less than the purchase price if there have been periods of negative returns in the market. Reduced Refund Value does not include any state-provided or procured matching contributions or earnings thereon.
however, depends upon a number of factors, including the timing of the refund and the reason for cancellation. The earnings portion of a Refund, if any, is subject to the actuarial soundness of the Plan and is subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may apply. Refund Value does not include any state-provided or procured matching contributions or earnings theron.
Please refer to the Plan Description and Master Agreement for more information.
All requests for cancellation must be made in writing in a format approved by the Plan.
The Three-Year Holding Period Requirement and the Value of Your Refund
The value of the refund, however, depends upon a number of factors, including the timing of the refund and the reason for cancellation:
- For all units held at least three years (and for contracts cancelled due to the Beneficiary’s death, disability, receipt of scholarship or admission to a U.S. Military Academy), the Purchaser will receive the Refund Value, which is an amount equal to the price paid for the unit plus or minus adjusted net investment earnings or losses on that amount, with the earnings rate set annually by the Board at a rate that is up to 2% less than the actual net earnings, is capped at 5%, and is net of any fees due and payable. The earnings portion of a Refund, if any, is subject to the actuarial soundness of the Plan and is subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may apply. Refund Value does not include any state-provided or procured matching contributions or earnings thereon.
- For units that do not meet the three-year holding period requirement, the Purchaser will receive the Reduced Refund Value: Reduced Refund Value is limited to the lesser of (1) the price you paid for the unit, or (2) the price you paid for the unit, plus or minus net investment earnings or losses on that amount, and is net of any fees due and payable. This means the Reduced Refund Value will not include any positive net earnings, but can be less than the purchase price if there have been periods of negative returns in the market. Reduced Refund Value does not include any state-provided or procured matching contributions or earnings thereon. It will be limited to the lesser of (1) the price paid for the unit, or (2) the price paid for the unit, plus or minus net investment earnings or losses on that amount, and is net of any fees due and payable. This means the Reduced Refund Value will not include any net positive earnings, but can be less than the purchase price if there have been periods of negative returns in the market. Reduced Refund Value does not include any state-provided or procured matching contributions or earnings thereon.