Ohio Code 3334.18 – Variable college savings program contracts
(A) A variable college savings program established by the Ohio tuition trust authority shall include provisions for a contract to be entered into between a contributor and the authority that will authorize the contributor to open an account for a beneficiary and authorize the contributor to substitute a new beneficiary for one originally named in the contract, to the extent permitted by section 529 of the Internal Revenue Code.
Terms Used In Ohio Code 3334.18
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Beneficiary: means :
(1) An individual designated by the purchaser under a tuition payment contract or through a scholarship program as the individual on whose behalf tuition units purchased under the contract or awarded through the scholarship program will be applied toward the payment of undergraduate, graduate, or professional tuition; or
(2) An individual designated by the contributor under a variable college savings program contract as the individual whose higher education expenses will be paid from a variable college savings program account. See Ohio Code 3334.01
- Contract: A legal written agreement that becomes binding when signed.
- Contributor: means a person who signs a variable college savings program contract with the Ohio tuition trust authority and contributes to and owns the account created under the contract. See Ohio Code 3334.01
- Higher education expenses: means expenses that meet the definition of "qualified higher education expenses" under section 529 of the Internal Revenue Code. See Ohio Code 3334.01
- Institution of higher education: means a state institution of higher education, a private college, university, or other postsecondary institution located in this state that possesses a certificate of authorization issued pursuant to Chapter 1713 of the Revised Code or a certificate of registration issued by the state board of career colleges and schools under Chapter 3332 of the Revised Code, or an accredited college, university, or other postsecondary institution located outside this state that is accredited by an accrediting organization or professional association recognized by the authority. See Ohio Code 3334.01
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes an individual, corporation, business trust, estate, trust, partnership, and association. See Ohio Code 1.59
- state: means the state of Ohio. See Ohio Code 1.59
- Tuition: means the charges imposed to attend an institution of higher education as an undergraduate, graduate, or professional student and all fees required as a condition of enrollment, as determined by the Ohio tuition trust authority. See Ohio Code 3334.01
(B) The authority shall provide adequate safeguards to prevent total contributions to a variable college savings program account or purchases of tuition units, either separately or combined, that are made on behalf of a beneficiary from exceeding the amount necessary to provide for the higher education expenses of the beneficiary, consistent with the maximum contributions permitted by section 529 of the Internal Revenue Code. However, in no event shall contributions or purchases exceed the allowable limit for a qualified tuition program under section 529 of the Internal Revenue Code.
(C)(1) Participation in the variable college savings program does not guarantee that contributions and the investment return on contributions, if any, will be adequate to cover future higher education expenses or that a beneficiary will be admitted to or permitted to continue to attend an institution of higher education.
(2) Returns on contributors’ investments in the variable college savings program are not guaranteed by the state and the contributors to the variable college savings program assume all investment risk, including the potential loss of principal and liability for penalties such as those levied for noneducational withdrawals.
(3) The state shall have no debt or obligation to any contributor, beneficiary, or any other person as a result of the establishment of the program, and the state assumes no risk or liability for funds invested in the variable college savings program.
(4) Informational materials about the variable college savings program prepared by the authority or its agents and provided to prospective contributors shall state clearly the information set forth in division (C) of this section.