§ 16-57-6.1 - Tuition savings program.
SECTION 16-57-6.1
§ 16-57-6.1 Tuition savings program.– (a) The authority shall, in conjunction with the executive director of theRhode Island student loan authority and the commissioner of higher education,establish in any form as it deems appropriate, a tuition savings program toallow persons to save money for the sole purpose of meeting qualified highereducation expenses.
(b) All money received in connection with the tuition savingsprogram shall be segregated from all other funds of the authority into two (2)funds, a program fund and an administrative fund. No more than two percent (2%)of money in the program fund may be transferred annually to the administrativefund for the purpose of paying operating costs of administering the tuitionsavings program. Money accrued by participants in the program fund may be usedfor payments to an eligible institution.
(c) The state investment commission shall invest money withinthe program fund in any investments which are authorized by the general laws,including equities and fixed income securities. The composition of investmentsshall be determined by the state investment commission, subject to the approvalof the authority. The state investment commission shall consider therecommendations of the commissioner of higher education and the executivedirector of the Rhode Island Student Loan Authority with respect to theappropriate composition of investments within the program fund.
(d) A participant may at any time withdraw funds from theparticipant's account in the tuition savings program in an amount up to thevalue of the account at the time the withdrawal is implemented, less suchadministrative fee as may be levied by the authority in connection with thewithdrawal.
(e) Notwithstanding any of the foregoing provisions, noadministrative fee may be levied by the authority in the event that aparticipant requests withdrawal of funds from the participant's account in thetuition savings program on account of, and within the meanings of § 529 ofthe Internal Revenue Code [26 U.S.C. § 529]:
(1) The death of the beneficiary of the account;
(2) The disability of the beneficiary; or
(3) A scholarship, allowance, or payment received by thebeneficiary to the extent that the amount of the refund does not exceed theamount of the scholarship, allowance, or payment.
(f) In the event that a participant requests a withdrawalfrom an account in the tuition savings program other than (1) a withdrawal usedfor qualified higher education expenses of the beneficiary of the account, or(2) for a reason referred to in subdivision (e)(1), (e)(2), or (e)(3) of thissection, the authority shall impose a more than de minimus penalty on theearnings portion of the withdrawal in accordance with § 529 of theInternal Revenue Code [26 U.S.C. § 529]; provided that nopenalty shall be imposed with respect to any such withdrawal, or any otherwithdrawal, from any account in the tuition savings plan to which the tax madeapplicable by § 529 of the Internal Revenue Code [26 U.S.C. §529] is effective.
(g) Resources of the authority and the Rhode Island studentloan authority shall be employed to effect implementation of the tuitionsavings program.