| (a) The prepaid tuition contract may be terminated by the board: (1) if the board determines that a purchaser has misrepresented residency, age, or other information required by the board in connection with the purchase of a contract; (2) upon default for failure to pay any amounts due under the prepaid tuition contract prior to the expiration of any applicable grace periods as outlined in §7.134 of this title (relating to Default and Delinquency Conversion), unless such contract is converted to a Pay-As-You-Go contract; or (3) if the purchaser fails to provide a valid social security account number or other applicable tax identification number for the purchaser or beneficiary within six months of enrollment. (b) At its option, a purchaser may voluntarily cancel a prepaid tuition contract upon submission of a proper written request signed by the purchaser. (c) A prepaid tuition contract terminates automatically on the tenth anniversary of the date the beneficiary was projected to graduate from high school, as indicated by the purchaser in the enrollment contract. (1) For the purpose of this subsection, the date the beneficiary is projected to graduate from high school includes the projected completion of a nontraditional secondary education, such as obtaining a general education development certificate, certificate of high school equivalency, or other credentials equivalent to a public high school degree, as indicated by the purchaser in the enrollment contract. (2) Time spent as an active duty member of the United States armed services shall toll the ten-year anniversary period. (3) If there is a change of beneficiary, the ten-year anniversary period is calculated based on the projected high school graduation date of the new beneficiary, as indicated in the enrollment contract or change of beneficiary form. (4) If a contract has been terminated automatically, the plan manager will make a reasonable effort to locate the purchaser for the purpose of processing a refund. (5) Until the purchaser is located or the purchaser applies for a refund, any unused monies from the account will remain in the Fund to support the actuarial soundness of the Fund. (6) Once a contract has been terminated automatically, the account will cease to accrue any further net earnings as of the date the contract has been terminated. (d) Refunds for cancellations or terminations will be governed by §7.135 of this title (relating to Refunds). |
