Appendix E - Master Contract.pdf

MASTER CONTRACT

MASTER CONTRACT

SECTION 1: DEFINITIONS

1.01 “Account Owner” means the person who is designated on the Application as the “account owner,” unless the owner of the Contract was subsequently changed, and who is the owner of record. There may only be one Account Owner for the Contract. The Account Owner must be 18 years old or older and must be a United States citizen or resident alien with a valid Social Security Number.

1.02 “Additional Tax” means the same as that term is defined in Section 529 of the Code. Currently, a 10% additional tax is applied to the earnings portion of any Non- Qualified Withdrawal. Residents of states other than Florida may have a state income tax, which applies an additional tax to any Non-Qualified Withdrawal.

1.03 “Application” means the collection of information specified in Rule 19B-4.001, Florida Administrative Code, for purchase of a Contract or Plan in the Program.

1.04 “Authorized Agent” means a person who is authorized by the Account Owner to act on the Account Owner’s behalf during the life of the Account Owner. Where an agent has been authorized by the Account Owner, Account Owner and Authorized Agent are used interchangeably.

1.05 “Beneficiary” means the person for whom a Contract, and all Plans therein, is purchased, as defined in Section 1009.97(3)(f), Florida Statutes, and Section 529 of the Code. A specific Beneficiary must be named in the Contract. The Beneficiary must be a United States citizen or a resident alien with a valid Social Security Number. The Social Security Number is not required when the Application is submitted, but it must be provided shortly thereafter or the Plan(s) will be subject to termination pursuant to paragraph 9.03.

1.06 “Benefit Transfer Method” means the calculation to determine the value of Contract benefit transfers. There are two Benefit Transfer Methods: (1) using a credit hour (or restricted) basis, the Board will transfer 15 semester credit hours of benefits per semester of invoice, or if invoiced by credit hours, the number of credit hours taken by the Beneficiary; or (2) using a dollars (or unrestricted) basis, the Board will transfer the number of semester credit hours of benefits required to pay the amount invoiced up to the total value of the Plan(s). The dollar basis option may cause the

Plan(s) to deplete faster than if the restricted payment option was selected.

1.07 “Board” means the Florida Prepaid College Board or an organization authorized by the Board.

1.08 “Code” means the Internal Revenue Code of 1986, as amended.

1.09 “Contract” means the advance payment contract and is the complete and exclusive contract between the Account Owner and the Board related to the Program and any Plan(s) purchased for the Beneficiary by the Account Owner at any time. The Contract consists of the Application(s); this Master Contract, as amended from time to time by the Board to comply with Federal laws and regulations and the Florida Legislature’s grant of authority under Sections 1009.971(4)(b), 1009.971(6), and 1009.98(4)(a) - (l) through the rulemaking process as more fully described in Section 120.54, Florida Statutes; and the most recent Participation and Payment Schedule. The applicable provisions of part IV, Chapter 1009, Florida Statutes, rules contained in Chapter 19B, Florida Administrative Code, and Section 529 of the Code, each as amended from time to time, shall apply to the Contract and are incorporated by reference. The Contract supersedes any prior agreement, oral or written, and any other communications between the parties hereto relating to the subject matter of the Contract.

1.10 “Co-Purchaser” means the same as Survivor and these terms may be used interchangeably.

1.11 “Dormitory Fee” means the fee charged by a State University for residence in a double-occupancy, air-conditioned dormitory room.

1.12 “Effective Date” means the date(s) for the Contract and Plan(s) used for date-specific eligibility, benefits and requirements. The Effective Date of the Contract is the last day of the enrollment period for which the Application for the oldest Plan was accepted. The Effective Date of each Plan within a Contract is the last day of the enrollment period in which the Plan(s) was purchased.

1.13 “Eligible Educational Institution” means an accredited, postsecondary educational institution offering credit toward a bachelor’s degree, an associate’s degree, a graduate level or professional degree or another recognized postsecondary degree, including certain proprietary institutions and postsecondary vocational schools and certain institutions in foreign countries, provided such institution must be eligible to participate in U.S. Department of Education student aid programs.

Institutions of higher education must qualify under Section 529 of the Code as an Eligible Educational Institution.

1.14 “Family Empowerment Scholarship Program Account” means a Scholarship account established pursuant to Section 1002.394, Florida Statutes.

1.15 “Florida College” means any public postsecondary educational institution in the Florida College System as defined in Section 1000.21(3), Florida Statutes.

1.16 “Foundation” means the Florida Prepaid College Foundation, Inc.

1.17 “Joint Approver” means the person designated by the Account Owner to have Joint Approval for a Contract or Plan. The Joint Approver must be 18 years old or older and must be a United States citizen or resident alien with a valid Social Security Number. Survivors designated by July 1, 2025 on Contracts with an Effective Date after February 1, 2009 had Joint Approval and, therefore, were reclassified as Joint Approvers. Designation of a Joint Approver is optional.

1.18 “Joint Approval” means an authorization made by the Account Owner and the Joint Approver together.

1.19 “Local Fee” means: (a) the activity and service, health, and athletic fees authorized in Section 1009.24(9) – (12), Florida Statutes, charged by a State University; or (b) the student activity and service fee authorized in Section 1009.23, Florida Statutes, and charged by a Florida College. The technology fee authorized in Section 1009.23(10), Florida Statutes, charged by a Florida College is also covered by Local Fee Plans purchased after July 1, 1999.

1.20 “Matriculation Year” means the first year that the Beneficiary may begin using Contract benefits.

1.21 “Maximum Account Balance” means the limit on the total value of Plans and Florida Investment 529 Plan accounts for the Beneficiary. Currently, the Maximum Account Balance is $500,000.

1.22 “Member of the Family” means the same as that term is defined in Section 529 of the Code. A Member of the Family includes: (1) a son or daughter, or a descendant of either; (2) a stepson or stepdaughter; (3) a brother, sister, stepbrother, or stepsister; (4) the father or mother, or an ancestor of either; (5) a stepfather or stepmother; (6) a son or daughter of a brother or sister; (7) a brother or sister of the father or mother; (8) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law;

or (9) the spouse of the Beneficiary or the spouse of any individual described in (1) through (8) above.

1.23 “Non-Qualified Withdrawal” means a withdrawal or refund from the Contract, other than the usage of Plan benefits at an Eligible Educational Institution; a refund due to death, disability, or Scholarship; or a Rollover Refund.

The earnings portion of the withdrawal is subject to state and federal income taxes and the Additional Tax.

1.24 “Parent” means the same as that term is defined in Section 1000.21(5), Florida Statutes. In general, Parent refers to either or both parents, any guardian or person in a parental relationship or exercising supervisory authority in place of the parent.

1.25 “Participation and Payment Schedule” means the document provided by the Board to the Account Owner, which identifies the Account Owner, Survivor(s), Beneficiary, Plan(s) purchased, and payment information.

1.26 “Plan” means the Florida Prepaid College Plan(s) purchased by the Account Owner for the Beneficiary of the Contract. To the extent offered by the Board, more than one Plan may be purchased and included in a Contract.

1.27 “Program” means the Stanley G. Tate Florida Prepaid College Program which is established under Section 1009.98, Florida Statutes, and is also marketed as the Florida Prepaid 529 Plan.

1.28 “Projected College Enrollment Year” means the year that the Beneficiary is projected to begin using Contract benefits based on the information about the Beneficiary’s age or grade contained in the Application.

1.29 “Purchaser” means the same as Account Owner and these terms may be used interchangeably.

1.30 “Qualified Higher Education Expenses” means the tuition, fees, room and board, and the cost of books, supplies and equipment permitted under Section 529 of the Code and required for the enrollment or attendance of a Beneficiary at an Eligible Educational Institution, including undergraduate and graduate schools. Room and board expenses are subject to limitations under Section 529 of the Code.

1.31 “Qualified Tuition Program” means a program established for the purpose of meeting the Qualified Higher Education Expenses of the Beneficiary and which meets the other requirements of Section 529 of the Code.

1.32 “Redemption Value” means the balance of the Plan(s) and consists of valid payments received by the Board for the Plan(s) less any fees, usage, withdrawals, and refunds.

1.33 “Registration Fee” means: (a) the tuition fee authorized in Section 1009.24(4), Florida Statutes, financial aid fee authorized in Section 1009.24(7), Florida Statutes, and Capital Improvement Trust Fund fee authorized in Section 1009.24(8), Florida Statutes, charged by a State University; or (b) the tuition fee, authorized in Section 1009.23(3), Florida Statutes, financial aid fee authorized in Section 1009.23(8), Florida Statutes, and the fee for capital improvements authorized in Section 1009.23(11), Florida Statutes, charged by a Florida College.

1.34 “Request” means an authorization, which includes all necessary information required by the Board, either online at myfloridaprepaid.com or in writing. The Board may request additional information, documentation, or authorization before processing.

1.35 “Residency” means that a Beneficiary must have been domiciled in Florida at least 12 consecutive months prior to and including the date the Application or change of Beneficiary is signed. A Beneficiary under the age of one year must have been born and continuously domiciled in Florida from birth through the date the Application or change of Beneficiary is signed. A Beneficiary under 18 years of age may be a resident of another state if the non-custodial Parent has been domiciled in Florida at least 12 consecutive months prior to and including the date the Application or change of Beneficiary is signed.

1.36 “Restricted Contract” means a Contract that has restrictions on part or all of the account rights and transactions of the Plans. The Contract may be restricted as a result of a court order, unusual account activity, or for review by the Board.

1.37 “Rollover Contribution” means a contribution from another Qualified Tuition Program to the Program as permitted and defined under Section 529 of the Code as a rollover. In general, this means the withdrawal from another Qualified Tuition Program, a Coverdell Education Savings Account, or a Series EE Savings Bond for the purpose of contributing to the Program, as authorized by Section 529 of the Code. The two conditions for this withdrawal not being treated as a Non-Qualified Withdrawal are: (1) the funds are transferred to the Program within 60 days of such distribution; and (2) the transfer occurs at least 12 months from the date of a previous transfer to any Qualified Tuition Program for the benefit of the Beneficiary.

1.38 “Rollover Refund” means a refund from the Program with the intent to contribute the funds to another Qualified Tuition Program, Qualified ABLE Program, or a Roth IRA, as permitted and defined under Section 529 of the Code as a rollover.

1.39 “Scholarship” means financial or in-kind award or grant given to the Beneficiary for study, training, or research, and which does not constitute compensation for personal services.

1.40 “State University” means any university in the State University System as defined in Section 1000.21(6), Florida Statutes.

1.41 “Student” means the same as Beneficiary and these terms may be used interchangeably.

1.42 “Survivor” means the person designated by the Account Owner to receive Account rights in paragraph 3.06.

Survivor does not mean the same as Beneficiary. The Survivor must be 18 years old or older and must be a United States citizen or resident alien with a valid Social Security Number. Designation of a Survivor is optional.

1.43 “Tuition Differential Fee” means the fee charged by a State University pursuant to Section 1009.24(16), Florida Statutes.

1.44 “Vocational-Technical School” means an applied technology diploma program or vocational certificate program conducted by a Florida College or an area technical center operated by a district school board.

SECTION 2: PARTICIPATION IN THE PROGRAM

2.01 Enrollment Periods.

Periodically, the Board may announce an enrollment period, which shall be published on the Board’s website myfloridaprepaid.com. The terms and features of the Program and Plans in subsequent enrollment periods may differ from the terms and features described in this Master Contract. No representation is made or assurance given that there will be additional enrollment periods, or the enrollment periods will take place annually. The terms and features of any enrollment period may change as necessitated by alterations to state law. The Board retains the right to limit the number of Contracts or Plans that may be purchased in any given enrollment period, current or subsequent, although there are no plans currently for any such limits.

2.02 Residency.

(a) Documentation proving Residency is required whenever a Beneficiary is named in a Contract and occurs when: (1) an Application is submitted; or (2) the Beneficiary is changed pursuant to paragraph 8.02.

(b) Residency may be shown by submitting documentation indicating that the Beneficiary is, and has been, a resident of Florida for the past 12 months. Typical types of documentation include: (1) voter’s registration card; (2) driver’s license; (3) certificate of domicile; (4) homestead exemption; (5) utility bills at the same residence; (6) professional or occupational license; (7) proof of full-time Florida employment; and (8) Florida vehicle registration.

(c) There are additional types of documentation which may show Residency depending on the age or grade of the Beneficiary. For a Beneficiary under the age of one, Residency may be shown by submitting a birth certificate indicating the Beneficiary was born in Florida. For a Beneficiary between the age of one and kindergarten enrollment, Residency may be shown by submitting a progress report from a preschool or day care center indicating 12 months of residency. For a Beneficiary enrolled in kindergarten through the 12th grade, Residency may be shown by submitting a school report card or transcript from a Florida public or private school.

(d) For a Beneficiary in 12th grade or below, Residency also may be shown by: (1) showing that the Beneficiary’s Parent could meet the Residency requirement by submitting documentation described in (b); and (2) confirming the Beneficiary does in fact satisfy the Residency requirement.

(e) The Board may request specific Residency verification using any one, or more, of the foregoing types of documentation to confirm eligibility for a Plan and/or Plan price.

(f) A Beneficiary with an active Contract meets the Residency requirement for the purchase of a supplemental or replacement Contract or Plan.

(g) A Beneficiary, or Parent, demonstrating residency with a Board approved State agency or organization, meets the Residency requirement.

2.03 Disclosure of Contract or Plan(s).

The Board may disclose, without identifying the Account Owner or status of the Contract or Plan, the existence of a Contract and the type of Plan(s) purchased for the

Beneficiary to either limit or reject an Application by the Account Owner or a different potential Account Owner.

2.04 Submitting an Application.

(a) The Application must be completed according to the Application instructions. A valid email address is required to access your Contract online and receive Program communications. A separate Application is required for each Beneficiary. The Application may be completed online at myfloridaprepaid.com.

(b) Applications are offers to purchase Plan benefits for a Beneficiary for up to the price of the selected Plan and payment option.

2.05 Application Acceptance.

(a) A Contract is established once the Board confirms acceptance of the Application by issuing the initial Participation and Payment Schedule to the Account Owner.

A Plan is purchased once the Board confirms the purchase by issuing an initial or updated Participation and Payment Schedule reflecting the Plan.

(b) If more than one Application is received on behalf of the same Beneficiary, then the Board shall process each Application in the order of receipt.

(c) If one or more Plans have been purchased by one or more Account Owners for the same Beneficiary, the Board may accept the Application only to the extent that the Beneficiary is eligible.

(d) If the Beneficiary is not eligible, the Board will reject the Application.

2.06 Maintenance of Contact Information.

The Account Owner is responsible for notifying the Board of any change in contact information, including email addresses, mailing addresses, and phone numbers, of the Account Owner, Joint Approver(s), Survivor(s), Authorized Agent, and Beneficiary.

SECTION 3: ACCOUNT RIGHTS

3.01 Rights of Account Owners.

(a) The Account Owner is the owner of the Redemption Value.

(b) For Contracts and Plans where a Joint Approver is designated, Joint Approval is required for changes in the Beneficiary, Account Owner, Joint Approver(s), and Survivor(s); voluntary termination; and refunds associated with involuntarily terminations for the relevant Contracts or

Plans. The Account Owner may authorize all other Contract changes and refunds.

(c) The Account Owner may obtain and update information regarding the Contract. All official notices from the Program will be directed only to the Account Owner.

3.02 Account Owners Acting in a Custodial Capacity.

(a) The rights of an Account Owner are limited where the Account Owner acts in a custodial capacity pursuant to the Uniform Gifts to Minors Act and/or Uniform Transfers to Minors Act (“UGMA/UTMA”), a court order appointing a guardian, or pursuant to the Beneficiary’s right of survivorship while the Beneficiary is under 18 years of age.

(b) All funds associated with a Contract or Plan in a custodial capacity are considered custodial funds, subject to the same requirements and restrictions creating the custodial capacity.

(c) The Account Owner may not: (1) change the Account Owner without providing documentation acceptable to the Board indicating authority to do so; (2) change the Beneficiary; or (3) designate a Joint Approver or Survivor.

(d) The Account Owner may only request a refund for the benefit of the Beneficiary.

(e) At the age of 18, the Beneficiary becomes the Account Owner, unless the court order specifies otherwise.

3.03 Account Owners of Restricted Contracts.

(a) A court may order funds to be deposited into a Restricted Contract for the benefit of a specified Beneficiary. Further, a court may order an existing Contract to be a Restricted Contract.

(b) The court order may specify any restrictions and terms of distribution for the Restricted Contract.

(c) The parties of the court order bear the ultimate responsibility for following and enforcing the court order.

(d) To effectuate a Restricted Contract status, the Board must receive a copy of the complete and executed court order. This Restricted Contract status terminates upon completion of the requirement(s) within the court order as determined by the Board or upon receipt of a court order superseding or removing the previous court order(s).

(e) Where the Board receives documentation to raise meaningful doubt about who is the Account Owner or who is entitled to the funds in the Contract or Plan, the Board may remove the disputed funds and/or effectuate a Restricted Contract status. The Restricted Contract status terminates upon (1) receipt of a court order clarifying the rights of the parties with respect to the Contract or Plan, (2) by written, notarized mutual agreement of the parties disputing rights regarding the Contract or Plan, or (3) for other good cause shown, as determined by the Board.

3.04 Restrictions for Contracts with Family

Empowerment Scholarship Program Account Funds.

(a) Contributions from, or traceable to, a Family Empowerment Scholarship Program Account are subject to the rights and restrictions contained in the Contract and Section1002.394, Florida Statutes.

(b) The Account Owner may not change the Beneficiary while the Contract contains Family Empowerment Scholarship Program Account funds.

(c) Private funds will be used before Family Empowerment Scholarship Program Account funds.

(d) Family Empowerment Scholarship Program Account funds will not be made payable to the Account Owner except as: (1) an Account Owner reimbursement, (2) a Scholarship refund, or (3) an unavailable dormitory refund.

(e) Family Empowerment Scholarship Program Account funds may be removed from a Contract and returned to the State of Florida pursuant to Section 1002.394, Florida Statutes.

3.05 Rights of Joint Approvers.

(a) The Joint Approver enjoys a right of survivorship for the Account Owner.

(b) For Contracts and Plans where a Joint Approver is designated, Joint Approval is required for changes in the Beneficiary, Account Owner, Joint Approver, and Survivor(s); voluntary termination; and refunds associated with involuntarily terminations for the relevant Contracts or Plans.

(c) Except as provided herein, the Joint Approver does not own, control, or have rights to the Contract or Plan(s).

(d) The Joint Approver may obtain information regarding the Contract or Plan(s) and update his/her own contact information. The Board may provide information regarding the Contract or Plan(s) to, and communicate with, the Joint Approver.

3.06 Rights of Survivors.

(a) The Survivor enjoys a right of survivorship for the Account Owner, which is subordinate only to an effective right of survivorship by the Joint Approver.

(b) Except as provided herein, the Survivor does not own, control, or have rights to the Contract or Plan(s).

(c) The Survivor(s) may obtain information regarding the Contract or Plan(s) and update his/her own contact information. The Board may provide information regarding the Contract or Plan(s) to, and communicate with, the Survivor(s).

3.07 Rights of Beneficiaries.

(a) The Beneficiary enjoys a right of survivorship for the Account Owner, which is subordinate to effective rights of survivorship by the Joint Approver and Survivor(s). If, and for as long as, the Beneficiary is a minor, the exercise of the right of survivorship requires a Parent of the Beneficiary to be the Account Owner acting in a custodial capacity pursuant to paragraph 3.02.

(b) Except as provided herein, the Beneficiary does not own, control, or have rights to the Contract or Plan(s).

(c) The Beneficiary may obtain information regarding the Contract, update the Contact information for the Beneficiary, and authorize the transfer of Contract benefits to an Eligible Educational Institution. The Board may provide information regarding the Contract to, and communicate with, the Beneficiary. The Beneficiary may not make any Contract change or terminate the Contract.

3.08 Holds and Access Restrictions.

(a) Holds and access restrictions may be used by the Board to grant or restrict information from, or access or modifications to, a Contract or Plan, including to comply with a court order or to protect the Contract or Plan from unauthorized access or modification.

(b) An Account Owner, Beneficiary, Joint Approver, and/or Survivor may request, and the Board may approve, a hold to temporarily delay an involuntary termination. The Board considers factors, including but not limited to, financial hardship and medical hardship.

SECTION 4: PLAN TYPES

4.01 General.

(a) An Account Owner may have only one active Contract for a specific Beneficiary.

(b) An Account Owner may purchase credit hours of Registration Fees and semesters of Dormitory Fees up to the amount required to earn a baccalaureate degree for a specific Beneficiary. A maximum sum of 120 credit hours of

Registration Fees may be purchased for a named Beneficiary.

(c) The Participation and Payment Schedule specifies the quantity of benefits purchased for each Plan in the Contract.

(d) Pricing for each type of Plan is determined based upon the prices approved by the Board for each respective Plan for the enrollment period during which the Board accepted the Account Owner’s Application for the Beneficiary, provided: (1) the payments required for such Plan(s) are received by the Board as required by the Participation and Payment Schedule; and (2) each such Plan is not subsequently voluntarily or involuntarily terminated.

(e) A Plan may be purchased only for a Beneficiary who is under the age of 21 on the first day of the enrollment period and has not completed the eleventh grade.

(f) The amount paid per semester credit hour to a State University for Registration Fees, Tuition Differential Fee, and Local Fees may vary, depending upon the Effective Date of the Plan.

4.02 Florida University Plans.

The purchase of a Florida University Plan prepays the Registration Fees, Tuition Differential Fee, and Local Fees for a number of semester credit hours at a State University, as specified in the Application, unless changed as provided in paragraphs 8.05 or 9.03.

(a) The purchase of a 1-Year Florida University Plan prepays the Registration Fees, Tuition Differential Fee and Local Fees, for 30 semester credit hours at a State University. The 1-Year Florida University Plan initially became available for purchase during the 2014-2015 open enrollment period.

(b) The purchase of a 4-Year Florida University Plan prepays the Registration Fees, Tuition Differential Fee, and Local Fees, for 120 semester credit hours at a State University. The 4-Year Florida University Plan initially became available for purchase during the 2010-2011 enrollment period.

4.03 Florida College Plans.

The purchase of a Florida College Plan prepays the Registration Fees and Local Fees for a specified number of lower division semester credit hours and/or a specified number of upper division semester credit hours at a State College, as specified in the Application, unless changed as provided in paragraphs 8.05 or 9.03.

(a) The purchase of a 2-Year Florida College Plan prepays the Registration Fees and Local Fees for 60 lower division semester credit hours at a Florida College. The 2-Year Florida College Plan initially became available for purchase during the 2010- 2011 enrollment period.

(b) The purchase of a 4-Year Florida College Plan prepays the Registration Fees and Local Fees for 60 lower division semester credit hours at a Florida College and for 60 upper division semester credit hours at a Florida College. The 4- Year Florida College Plan initially became available for purchase during the 2010-2011 enrollment period.

4.04 2 + 2 Florida Plan.

The purchase of a 2 + 2 Florida Plan prepays the Registration Fees and Local Fees for 60 lower division semester credit hours at a Florida College and the Registration Fees, Tuition Differential Fee, and Local Fees for 60 semester credit hours at a State University. The 2 + 2 Florida Plan initially became available for purchase during the 2010- 2011 enrollment period.

4.05 Tuition Plan.

There are three separate types of Tuition Plans:

(a) The 4-Yr University Tuition Plan prepays the Registration Fees for 120 semester credit hours at a State University.

(b) The 2 + 2 Tuition Plan prepays the Registration Fees for 60 lower division semester credit hours at a Florida College and the Registration Fees for 60 semester credit hours at a State University.

(c) The 2-Yr FL College Tuition Plan (formerly the two-year community college tuition plan) prepays the Registration Fees for 60 lower division semester credit hours at a Florida College.

(d) Tuition Plans do not cover Local Fees, the Tuition Differential Fee, or other institutionally imposed fees.

Tuition Plans are not available for purchase after January 31, 2010.

4.06 Tuition Differential Fee Plan.

There are two separate types of Tuition Differential Fee Plans:

(a) The 4-Yr University TDF Plan prepays the Tuition Differential Fee for 120 semester credit hours at a State University and only may be purchased as an addition to a 4-Yr University Tuition Plan purchased on or after February 1, 2007.

(b) The 2 + 2 TDF Plan prepays the Tuition Differential Fee for 60 semester credit hours at a State University and only may be purchased as an addition to a 2 + 2 Tuition Plan purchased on or after February 1, 2007.

(c) Tuition Differential Fee Plans do not include payment of Registration Fees, Local Fees, or other institutionally imposed fees.

4.07 Local Fee Plan.

There are three separate types of Local Fee Plans:

(a) The 4-Yr University Local Fee Plan prepays the Local Fees for 120 semester credit hours at a State University and only may be purchased as an addition to a 4-Yr University Tuition Plan.

(b) The 2 + 2 Local Fee Plan prepays the Local Fees for 60 lower division semester credit hours at a Florida College and the Local Fees for 60 semester credit hours at a State University and only may be purchased as an addition to a 2 + 2 Tuition Plan.

(c) The 2-Yr FL College Local Fee Plan (formerly the community college local fee plan) prepays the Local Fees for 60 lower division semester credit hours at a Florida College and only may be purchased as an addition to a 2- Yr FL College Tuition Plan.

(d) Local Fee Plans do not include payment of Registration Fees, the Tuition Differential Fee, or other institutionally imposed fees.

4.08 Dormitory Plan.

(a) The Dormitory Plan provides payment for a double-occupancy, air-conditioned dormitory room specified by the State University at which the Beneficiary is enrolled and approved by the Board and is subject to availability.

Residence in a State University dormitory is subject to available space and is not guaranteed by the Board.

(b) The Dormitory Plan does not cover private dorms, security/damage deposits, meal plans, or any other fees.

(c) The amount paid per semester to a State University for Dormitory Fees may vary, depending upon the Effective Date of the Dormitory Plan.

(d) The 1-Year Dormitory Plan prepays 2 semesters of Dormitory Fees. Up to 4 semesters (4-years) of Dormitory Fee coverage may be purchased for a named Beneficiary.

SECTION 5: PAYMENT OPTIONS AND

PAYMENTS

5.01 Payment Options.

Two payment options are available: (1) a lump-sum payment plan and (2) a monthly payment schedule.

Payment amounts are determined based on the age of the Beneficiary when each respective Plan is purchased and the number of payments selected.

5.02 Payment Methods.

(a) Payments may be made online through myfloridaprepaid.com.

(b) Payments may be made by check, Money Order, cashier’s checks, automatic payment plan, or payroll deduction.

(c) Checks must be in U.S. dollars and should be made payable to the Florida Prepaid College Plan.

5.03 Rollover Contributions.

The Program does not accept Rollover Contributions.

5.04 Application of Funds.

Funds are applied to satisfy outstanding payments and fees for any Contracts, Plans, and Florida Investment 529 Plan accounts owned by the Account Owner. Funds received in excess of the amount currently due for Plan(s) are available for future Plan payments, transfer to a Florida Investment 529 Plan, or overpayment refund.

5.05 Payment Due Date.

Payments are due on the 20th day of each month. The first payment due date will be the 20th day of the first month following Application Acceptance.

5.06 Default.

Failure to make payment within 15 days of a due date will result in default by the Account Owner and suspension of Contract benefits.

5.07 Prepayment.

A lump-sum or partial prepayment may be made on a monthly payment schedule with no prepayment penalty but does not automatically change the total amount due for the Plan.

5.08 Payment Schedule Modification

An Account Owner may request an adjustment to their payment amount and number of payments. The Board will approve payment schedule modification pursuant to paragraph 8.06.

5.09 Lump-Sum Payoff.

(a) An Account Owner may Request a lump-sum payoff on a monthly payment schedule at any time and may reduce the total amount due for the Plan.

(b) The Board may initiate a lump-sum payoff on behalf of an Account Owner where the amount received for a Plan is sufficient to satisfy the payoff.

5.10 Maximum Account Balance Limit.

(a) The Board periodically reviews the Maximum Account Balance pursuant to IRS Regulations.

(b) The Maximum Account Balance may be lower than other Qualified Tuition Programs and lower than previously published amounts for the Program.

(c) The sum of all payments required for the Plan(s) in the Contract(s) for that Beneficiary and the account balance for all Florida Investment 529 Plan accounts for that Beneficiary may not exceed the Maximum Account Balance limit.

SECTION 6: FEES

6.01 Insufficient Funds Fee.

A fee of up to $20 will be assessed for each payment returned for insufficient funds.

6.02 Late Payment Fee.

A fee of up to $10 will be assessed if payment is not received by the Board within 15 days of the date due.

6.03 Termination Fee for Residency Fraud or Material

Misstatement.

A fee of up to $250 or 100 percent of the amount paid for a Contract, whichever is less, will be assessed if the Board determines that an Account Owner has made fraudulent statements relating to the Residency of an allegedly qualified Beneficiary or material misstatements on the Application or any document submitted by the Account Owner with respect to the Contract or Plan.

6.04 Fee Changes.

The Board may add, remove, increase, or decrease the fees charged in the Program.

6.05 No Refund of Fees.

The Board may apply the existing balance and future payments towards outstanding fees. Fees collected by the Board are non-refundable.

SECTION 7: USE OF BENEFITS

7.01 General.

(a) For Contract benefits to be available, all payments and fees for each Plan in the Contract must be current. The Board must have a valid Social Security Number and current contact information for the Beneficiary on file.

Contract benefits are not available until the summer semester of the Matriculation Year unless otherwise provided herein.

(b) To the extent covered by and payable under the Contract, the Tuition Differential Fee and Local Fee will be paid to an Eligible Educational Institution only with the payment for Registration Fees.

(c) Contract benefits are not payable until a Beneficiary is financially obligated to the Eligible Educational Institution, which generally occurs after the drop/add period at the beginning of a semester.

(d) By September 1st of each year, the Board will publish rates for the current academic year at myfloridaprepaid.com. If the Board is invoiced for an academic year prior to publication of the applicable rates, then, to avoid delay in payment, Contract benefits will be paid based on published rates for the prior academic year.

(e) Eligible Educational Institutions may vary or change rates during an academic year. The Board may update the published rates to reflect changes.

(f) Rate changes only apply to future Eligible Educational Institution invoices and remaining Contract benefits.

Previously utilized Contract benefits will not be recalculated.

7.02 Use of Benefits at State Universities and Florida

Colleges.

(a) Contract benefits will be paid to any State University or Florida College the Beneficiary attends without authorization by the Account Owner or Beneficiary.

(b) The Board will transfer the amount payable under the Plan(s) for that State University or Florida College by credit hour or semester enrolled, as applicable.

(c) To use a Dormitory Plan, the Beneficiary must file a complete and timely housing application with the applicable

State University and must comply with all housing authority rules and regulations. Each year, the State Universities determine which dormitories will be available for use by Beneficiaries. Not all dorms at each State University are available. The Board cannot guarantee that any Beneficiary will receive a dormitory room assignment.

(d) A Dormitory Plan may be used for other university-held housing approved by a State University. Amounts transferred for the actual housing fees cannot exceed the amount otherwise payable under the Plan to that State University. If the State University at which the Beneficiary is enrolled does not offer any approved double-occupancy dormitory rooms, the Board will pay up to the average cost of a double-occupancy, air-conditioned dormitory room in the State University System of Florida payable under the Plan towards a dormitory room at the State University.

(e) The Board will pay the first housing prepayment invoice received each academic year on behalf of a Beneficiary with at least one semester of Plan benefits available. The Beneficiary is responsible for any other housing prepayments for that academic year to any Eligible Educational Institution.

7.03 Conversions of Benefits for Use at State

Universities and Florida Colleges.

(a) The Board will convert: (1) State University benefits to be used at a Florida College; (2) Florida College benefits to be used at a State University; (3) Upper Division Florida College benefits to be used for Lower Division enrollment at a Florida College; and (4) Lower Division Florida College benefits to be used for Upper Division enrollment at a Florida College.

(b) The conversion calculations will be based upon the sum of each Plan’s respective coverage for Registration Fees, Tuition Differential Fee and Local Fees payable under the Plan for the credit hours enrolled.

For example, if the lower division Florida College fee rate is two-thirds of the State University rate at the time of matriculation, then three Florida College semester credit hours will be used to pay for two State University semester credit hours. Or, if the State University fee rate is one and one-half times the lower division Florida College rate, two State University semester credit hours will be used to pay for three Florida College semester credit hours.

(c) A Dormitory Plan may be transferred for Florida College housing that is operated by a Florida College or Florida College direct-support organization. Funds transferred to a Florida College or Florida College direct-support organizations shall not exceed the lesser of the actual fees or the average statewide fees associated with State University housing, payable under the Plan.

7.04 Use of Benefits at In-State Private Colleges and

Universities, Out-of-State Colleges and Universities, and Vocational-Technical Schools.

(a) In addition to Florida Universities and Florida Colleges, the Account Owner or Beneficiary may Request the use of Contract Benefits at any other Eligible Educational Institution. The Joint Approver and Survivor may not Request a transfer of benefits.

(b) The Board will transfer an amount not to exceed the current average rates payable under the Plan(s) to a State University or Florida College. Amounts transferred cannot exceed the actual tuition or housing fees of the Eligible Educational Institution.

(c) The Account Owner or Beneficiary may specify the Benefit Transfer Method.

(d) Only one semester of Dormitory Plan benefits may be used each semester.

7.05 Use of Dormitory Benefits During the Summer

Term.

(a) The Dormitory Plan is intended to cover the fall and spring terms. Generally, the cost of housing during the summer is less than the fall and spring. The difference between using the Dormitory Plan during the summer and either fall or spring may represent a significant reduction in benefits received.

(b) Notwithstanding (a), the Account Owner may authorize the use of the Dormitory Plan during summer terms by submitting a Request. The Board may require the Account Owner to submit a written waiver.

(c) The Board will pay the actual housing fees for the double-occupancy, air-conditioned dormitory room at the State University or transfer the amount payable under the Plan for that State University or other university-held housing approved by a State University. Amounts transferred for the actual housing fees cannot exceed the amount otherwise payable under the Plan to that State University for the prior fall or spring terms, whichever is higher.

7.06 Graduate-Level Courses.

(a) Unused Contract benefits may be applied toward comparable graduate-level tuition, mandatory fees, and housing fees based on the type of Plan with remaining benefits. The Board will transfer an amount not to exceed the amount payable under the Plan for undergraduate-level courses at that Eligible Educational Institution. Amounts transferred cannot exceed the actual tuition or housing fees of the Eligible Educational Institution.

(b) The Account Owner or Beneficiary may specify the Benefit Transfer Method.

7.07 Order of Benefits Utilized.

The Board will utilize available Plan benefits from the Beneficiary’s Contract(s) for any invoice from an Eligible Educational Institution for the Beneficiary in the following order: lower division Florida College benefits first; then upper division Florida College benefits; and then State University benefits. Where the same type of Plan benefits are available for the Beneficiary in more than one Plan or Contract, the Board will begin with the earliest purchase date.

7.08 Use of Fractional Benefits.

(a) If any conversion or payment calculation prior to academic year 2019-2020 results in the use of a fractional credit hour of Plan benefits, the Board will deduct a whole credit hour when the usage is equal to or greater than .50 and will not deduct a credit hour when the usage is less than .50. Beginning with academic year 2019-2020, and thereafter, the Board will deduct fractional credit hours.

(b) If a Dormitory Plan is used during a semester, the Board will deduct a whole semester of Plan benefits from the Dormitory Plan.

(c) The value of any fractional benefit equals the fractional unit multiplied by the current amount payable under the Plan.

7.09 Credit Restores.

If use of Plan benefits results in a credit balance at the Beneficiary’s Eligible Educational Institution, the Eligible Educational Institution may issue a refund to the Beneficiary. Generally, the Board does not accept these payments back and will not credit the Beneficiary’s Plan.

7.10 Benefit Period.

(a) Benefits of a Plan are valid for a 10-year period from the Projected College Enrollment Year.

(b) Time spent by the Beneficiary as an active duty member of the U.S. Armed Services while named as the Beneficiary of the Contract will be added to this period once evidence of military service is provided to the Board.

(c) On December 31st of the last year in the benefit period, the Contract shall be terminated and the Redemption Value will be escheated to the Florida Prepaid College Trust Fund.

SECTION 8: ACCOUNT CHANGES

8.01 General.

Unless otherwise provided herein, all Contract changes must be in writing, signed by the Account Owner, and received by the Board. The Board is not responsible for the validity of documentation related to Contract changes. If acceptable to the Board, Contract changes will take effect as of the date a change is processed by the Board.

8.02 Change of Beneficiary.

(a) The benefits and rights of the Contract or Plan may be transferred to an eligible substitute Beneficiary by submitting a Request. Any such Request must verify that the proposed substitute Beneficiary: (1) is a Member of the Family of the original Beneficiary; and (2) meets the Residency requirement at the time of substitution.

(b) If the Matriculation Year for the substituted Beneficiary is more than three years before or after the Projected College Enrollment Year, the Board may assess a payment at a level determined necessary to ensure the actuarial soundness of the Program.

(c) A change of Beneficiary does not affect when the Plan benefits will expire pursuant to paragraph 7.10.

(d) A Plan only may be transferred to another Contract for which the Account Owner of that Contract could, notwithstanding the age of the recipient Beneficiary, purchase the same plan type during an Open Enrollment Period.

(e) The change of Beneficiary Request will not be processed to the extent that it will cause the substitute Beneficiary to exceed the Maximum Account Balance.

8.03 Change of Account Owner.

(a) Ownership of the Contract may be transferred to a new Account Owner by submitting a Request.

(b) To effectuate a change in Contract ownership after the death of the Account Owner, a party with right of survivorship or, if none have been designated, a Parent acting in a custodial capacity for the Beneficiary, must submit a copy of the death certificate, or other legally recognized proof of death, and a Request.

(c) If the person who will become the new Account Owner already has an active Contract for the same Beneficiary, all Plans within this Contract will be irrevocably transferred to the new Account Owner’s existing Contract.

(d) Unless the Request specifies otherwise, the Authorized Agent, Joint Approver and Survivor designations on the transferred Plan(s) will remain in effect.

(e) This transfer does not constitute a termination.

8.04 Designation of Joint Approvers, Survivors, and

Authorized Agents.

(a) If a Contract or Plan does not have a Joint Approver, Survivor, or Authorized Agent the Account Owner may designate one by submitting a Request with the full legal name, Social Security Number, and complete contact information.

(b) The Account Owner may change or remove the Joint Approvers, Survivors, and Authorized Agents by submitting a Request. Changes are subject to applicable Account restrictions and Joint Approval.

(c) The designation or change of a Joint Approver, Survivor, or Authorized Agent may not be made by will or codicil.

8.05 Plan Change.

(a) A Plan may only be changed to a Plan which was offered at the time of purchase for a lower cost for the same payment option. For this calculation, Plans may not be aggregated.

(b) Plan change Requests must be received prior to the Beneficiary using Plan benefits.

(c) A Plan change may result in an overpayment refund.

8.06 Effect of Plan Change.

(a) A Plan change to the 2 + 2 Tuition Plan automatically changes an associated TDF Plan to a 2 + 2 TDF Plan. A Plan change to the 2-Yr FL College Tuition Plan terminates an associated TDF Plan.

(b) A Tuition Plan change automatically changes an associated Local Fee Plan to the same Plan type as the Tuition Plan.

8.07 Restoration.

A Plan without usage may be restored to a previous Plan type or payment schedule within 180 days of Plan change by paying all applicable reinstatement fees, any delinquent amounts owed on the Plan, and any amounts previously refunded.

SECTION 9: TERMINATION, REFUNDS AND

REINSTATEMENT

9.01 General.

Generally, refunds are made payable to the Account Owner.

9.02 Voluntary Termination.

(a) A Contract or Plan may be terminated in part, or in full, at any time and for any reason by submitting a Request.

(b) The Account Owner will receive a refund for the Redemption Value.

9.03 Involuntary Plan Change or Termination.

(a) If the full amount of a payment is not received by the Board within 120 days after the first payment due date or within 210 days after any subsequent payment due date or if supporting information requested on the Application is not received by the Board within 120 days after the first payment due date, then the Board may: (1) change the Plan type, (2) reduce the coverage purchased, (3) modify the payment option, or (4) terminate the Plan.

(b) To receive a refund for the Redemption Value of an involuntarily terminated Contract or Plan, a Request must be submitted to the Board.

9.04 Effect of Termination.

Termination of all Plans for a Beneficiary terminates the Contract.

9.05 Reinstatement.

(a) A Contract may be reinstated to good standing within 180 days of termination by reinstating one or more Plans.

(b) A Plan may be reinstated to good standing within 180 days of termination by paying any delinquent amounts owed on the Plan.

9.06 Overpayment Refunds.

(a) If the received funds exceed the amount currently due for Contract(s), Plan(s) and Florida Investment 529 Plans, a refund is available up to the amount of the excess funds.

(b) To request an overpayment refund, a Request must be submitted to the Board.

9.07 Death or Disability.

(a) If the Beneficiary dies or has a disability, a refund is available for an amount not to exceed the average rates payable under the Contract to a State University or a Florida College at the time of death or disability.

(b) To request a refund due to the death of the Beneficiary, a Request must be submitted to the Board with a copy of the Beneficiary’s death certificate.

(c) To request a refund based on the disability of the Beneficiary, a Request must be submitted to the Board with a letter from the Beneficiary’s physician specifically stating that the Beneficiary’s disability prevents the Beneficiary from attending an Eligible Educational Institution.

9.08 Scholarship.

(a) If the Beneficiary attending an Eligible Educational Institution is awarded a Scholarship, including, but not limited to, the Florida Bright Futures Scholarship, which pays the same…