166.228. Termination of contracts, conditions--refunds, when, amount. - Missouri Statutes

Termination of contracts, conditions--refunds, when, amount.

166.228. 1. An advance tuition payment contract shall not authorizetermination of the contract except when one of the following occurs:

(1) The qualified beneficiary dies;

(2) The qualified beneficiary is not admitted to a state institution ofhigher education after making proper application;

(3) The qualified beneficiary certifies to the trust, after attainingthe age of eighteen, that he or she has decided not to attend a stateinstitution of higher education and requests, in writing that the advancetuition payment contract be terminated;

(4) Other circumstances, determined by the trust and set forth in theadvance tuition payment contract, occur.

2. An advance tuition payment contract may provide for a refund pursuantto this section to a person to whom the refund is payable under the contractupon termination of the contract. The refund may include all or a portion ofthe payment or payments made by the purchaser under the contract and all or aportion of the accrued investment income attributable to the payment orpayments. However, except as provided in subsection 4 of this section, theamount of a refund shall not exceed the prevailing tuition cost on the date oftermination for the credit hours covered by the state institution of highereducation which charges the lowest rate of tuition. The amount of a refundshall be reduced by the amount transferred to a community college on behalf ofa qualified beneficiary when the contract is terminated and by the amounttransferred to a state institution of higher education on behalf of aqualified beneficiary. Termination of a contract and the right to receive arefund shall not be authorized under the contract if the qualified beneficiaryhas completed more than one-half of the credit hours required by the stateinstitution of higher education for the awarding of a baccalaureate degree.However, this provision shall not affect the termination and refund rights ofa graduate of a community college.

3. An advance tuition payment contract may authorize a person who isentitled under the advance tuition payment contract to terminate the contract,to direct payment of the refund to an independent degree-granting college oruniversity in this state. If directed to make payments pursuant to thissubsection, the trust shall transfer to the designated institution an amountequal to the tuition due for the qualified beneficiary, but the trust shallnot transfer a cumulative amount greater than the refund to which the personis entitled. If the refund exceeds the total amount of transfers directed tothe designated institution, the excess shall be returned to the person to whomthe refund is otherwise payable.

4. The amount of a refund paid upon termination of the advance tuitionpayment contract by a person who directs the trust pursuant to subsection 3 ofthis section to transfer the refund to an independent degree-granting collegeor university located in this state shall not be greater than the weightedaverage tuition cost of state institutions of higher education for the numberof credit hours covered by the contract on the date of termination.

(L. 1988 H.B. 1456 § 13)