2010 Rhode Island Code
Title 16 Education
CHAPTER 16-57 Higher Education Assistance Authority
§ 16-57-6.1 Tuition savings program.

§ 16-57-6.1 Tuition savings program. – (a) The authority shall, in conjunction with the executive director of the Rhode Island student loan authority and the commissioner of higher education, establish in any form as it deems appropriate, a tuition savings program to allow persons to save money for the sole purpose of meeting qualified higher education expenses.

(b) All money received in connection with the tuition savings program 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 administrative fund for the purpose of paying operating costs of administering the tuition savings program. Money accrued by participants in the program fund may be used for payments to an eligible institution.

(c) The state investment commission shall invest money within the program fund in any investments which are authorized by the general laws, including equities and fixed income securities. The composition of investments shall be determined by the state investment commission, subject to the approval of the authority. The state investment commission shall consider the recommendations of the commissioner of higher education and the executive director of the Rhode Island Student Loan Authority with respect to the appropriate composition of investments within the program fund.

(d) A participant may at any time withdraw funds from the participant's account in the tuition savings program in an amount up to the value of the account at the time the withdrawal is implemented, less such administrative fee as may be levied by the authority in connection with the withdrawal.

(e) Notwithstanding any of the foregoing provisions, no administrative fee may be levied by the authority in the event that a participant requests withdrawal of funds from the participant's account in the tuition savings program on account of, and within the meanings of § 529 of the 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 the beneficiary to the extent that the amount of the refund does not exceed the amount of the scholarship, allowance, or payment.

(f) In the event that a participant requests a withdrawal from an account in the tuition savings program other than (1) a withdrawal used for 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 this section, the authority shall impose a more than de minimus penalty on the earnings portion of the withdrawal in accordance with § 529 of the Internal Revenue Code [26 U.S.C. § 529]; provided that no penalty shall be imposed with respect to any such withdrawal, or any other withdrawal, from any account in the tuition savings plan to which the tax made applicable by § 529 of the Internal Revenue Code [26 U.S.C. § 529] is effective.

(g) Resources of the authority and the Rhode Island student loan authority shall be employed to effect implementation of the tuition savings program.
History of Section.
(P.L. 1997, ch. 81, § 2; P.L. 1997, ch. 91, § 2; P.L. 2001, ch. 364, § 2.)