| (a) In accordance with this subchapter, when a beneficiary
under a prepaid tuition contract redeems tuition units to pay costs
of tuition and required fees, the board shall apply money in the Fund,
in the amount provided by Education Code, §54.765, to pay all
or the applicable portion of the costs of the beneficiary's tuition
and required fees at the 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 in which the beneficiary
enrolls.
(1) Subject to subsection (c)(2) of this section, and
the other provisions of this section, a beneficiary may redeem any
type of tuition unit or partial tuition unit for attendance at an
institution described by this section.
(2) A general academic teaching institution or two-year
institution of higher education shall accept the amount transferred
to the institution under Education Code, §54.765(c), when the
unit or units are redeemed as payment for all or the applicable portion
of the beneficiary's tuition and required fees.
(b) To pay for the entire cost of undergraduate resident
tuition and required fees for an academic year consisting of 30 semester
credit hours:
(1) redemption of 100 Type I tuition units (or an approximate
equivalent amount of Type II or III units) is required at the general
academic teaching institution with the highest tuition and fee cost
as described by Education Code, §54.753(d);
(2) redemption of 100 Type II tuition units (or an
approximate equivalent amount of Type I or III units) is required
at a general academic teaching institution with the applicable tuition
and fee cost at the Weighted Average as described by Education Code, §54.753(e);
and
(3) redemption of 100 Type III units (or an approximate
equivalent amount of Type I or II units) is required at a two-year
institution of higher education with the applicable tuition and fee
cost at the Weighted Average as described by Education Code, §54.753(f).
(c) The number of tuition units that must be redeemed
to pay for the entire cost of tuition and required fees for an academic
year at another general academic teaching institution or two-year
institution of higher education may be higher or lower:
(1) in proportion to the amount that the cost of tuition
and required fees at that institution is higher or lower than the
amount determined for the institution with the highest cost or Weighted
Average cost, as applicable; or
(2) if a more or less valuable type of tuition unit
is redeemed.
(d) To assist purchasers in determining the number
of tuition units a beneficiary must redeem to cover the costs of tuition
and required fees at general academic teaching institutions and two-year
institutions of higher education, each year the board shall prepare
a tuition unit redemption chart and will post the chart on the board's
Internet website. The chart will show for each general academic teaching
institution and for each two-year institution of higher education
the number of each type of units purchased that year that would be
required to cover the cost of tuition and required fees, based on
an academic year consisting of 30 semester credit hours.
(1) The exact amount of tuition units that will be
required to attend a particular institution will depend upon the cost
of tuition and required fees at the institution in the year of redemption.
(2) For Type I tuition units, the number of units required
to attend a particular institution may be less than anticipated when
purchased if that institution's costs are less than the general academic
teaching institution with the highest tuition and fee cost in the
year of redemption.
(3) For Type II and III tuition units, the number of
units required to attend a particular institution may be more or less
than anticipated when purchased, and will depend on whether that institution's
costs are higher or lower than the Weighted Average cost in the year
of redemption. To the extent the cost of a particular institution
is higher than the Weighted Average cost, the beneficiary will have
to redeem additional tuition units to cover the higher cost, or pay
the amount of the difference as provided in subsection (e) of this
section.
(e) If a beneficiary redeems fewer tuition units of
the type or combination of types necessary to pay the total cost of
the beneficiary's tuition and required fees at the 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 at which the beneficiary enrolls, the beneficiary is responsible
for paying the amount of the difference between the amount of tuition
and required fees for which the beneficiary pays through the redemption
of one or more tuition units and the total cost of the beneficiary's
tuition and required fees at the institution.
(f) A beneficiary who redeems Type III tuition units
(or an approximate equivalent amount of Type I or II units) to attend
a public junior college and who does not reside within the taxing
jurisdiction of the junior college is responsible for paying any portion
of the tuition charged by the junior college to persons who do not
reside within that taxing jurisdiction.
(g) A beneficiary or purchaser may not redeem a tuition
unit earlier than the third anniversary of the date the unit was purchased.
(1) For the purpose of calculating the three-year holding
period for an initial Pay-As-You-Go purchase, the first payment due
date after initially enrolling in the program is considered the date
the initial units were purchased. These units may not be redeemed
to pay for tuition and required fees until the third anniversary after
the payment due date.
(2) For installment plan payments, the three-year holding
period is considered met if the purchaser enrolls in the program and
the first payment due date is at least three years prior to any redemption
of tuition units, and the installment plan is paid in full before
redemption of any of the tuition units.
(3) Additional Pay-As-You-Go purchases start a new
three-year holding period as of the date payment is received for the
additional tuition units.
(4) Under the three-year holding period, the latest
date that a purchaser could purchase tuition units to pay for a semester
of undergraduate education using Pay-As-You-Go purchases is three
years prior to the date of expected redemption of the tuition units,
subject to the requirement that all tuition units under the contract
must be used not later than the 10th anniversary of the date the beneficiary
is projected to graduate from high school, not counting time spent
by the beneficiary as an active duty member of the United States armed
services.
(5) If all of the tuition units in an account do not
meet the three-year holding period, the purchaser may redeem those
units or fractional units that meet the three-year holding period,
and redeem the remaining tuition units in the account when the three-year
holding period is met.
(h) A beneficiary may redeem more than 100 tuition
units in one academic year of the type or combination of types as
needed to pay the total cost of the beneficiary's tuition and required
fees at an eligible educational institution.
(i) To accommodate part-time attendance or the enrollment
in more or less semester hours than the contemplated 30 credit hours
in an academic year, the board may calculate a per credit hour tuition
unit cost for the eligible educational institution applicable to the
year of redemption, whereby the number of tuition units required to
be redeemed shall be in proportion to the amount that tuition and
required fees to be charged to the beneficiary by the eligible educational
institution are more or less costly than the cost for attending two
semesters of 15 credit hours each or 30 total credit hours in an academic
year.
(j) A beneficiary may redeem fractional tuition units
as needed to pay the cost of the beneficiary's tuition and required
fees at an eligible educational institution.
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| Source Note: The provisions of this §7.125 adopted to be effective August 27, 2008, 33 TexReg 6957; amended to be effective September 21, 2010, 35 TexReg 8503; amended to be effective April 5, 2020, 45 TexReg 2317 |
