Virginia College Savings Plan Overview

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Account Owner

"Purchaser" in Section 23-38.75 of the Code of Virginia (1950), as amended, means a person who is at least 18 years of age, and is either a U.S. citizen or legal U.S. resident, or a corporation, partnership, trust, charitable organization, or any other person described in Section 7701(a)(1) of the Internal Revenue Code of 1986, as amended (26 U.S.C. Section 7701(a)(1)), and who is or was obligated to make Payments under a Contract. There may only be one Account Owner per account. Trustees are responsible for determining whether the terms of a trust allow ownership of a Contract. The VCSP will not review trust documents and the trustee bears all liability for such determination. The term "Account Owner" also applies to the designee of survivorship rights indicated on the Application upon the death of the original Account Owner or a transferee Account Owner pursuant to the provisions of Article VIII(2). Any person or entity may make Payments on a VPEP Contract, but only the Account Owner may execute Contract changes, conversions, transfers, rollovers, terminations and refund requests. All Payments are deemed to have come from the Account Owner for all state tax reporting and other administrative purposes. Individuals who are not Account Owners have not established a customer relationship with VPEP and have no legal rights with regard to a VPEP Contract. Any requests to change the Account Owner must be signed by both the current Account Owner (or the current Account Owner's personal representative) and the substitute Account Owner. In order to purchase a Contract, either the Account Owner or the Beneficiary must be a Resident. Contracts may also be purchased for non-resident children who have a parent who is a Resident.

Application

The form (whether hard copy or online) signed by the Account Owner and submitted to the Board to solicit enrollment of the Beneficiary in the Virginia Prepaid Education Program.

Beneficiary

A person who is a United States citizen or legal U.S. resident and who is entitled to receive Benefits under a Contract and who, at the time the Account Owner submits an Application, has not completed the ninth grade. A Beneficiary must have been born at the time the Application is submitted. Either the Beneficiary or the Account Owner must be a Resident. Contracts may also be purchased by nonresident Account Owners for non-resident children who have a parent who is a Resident.

Benefits

Payments provided under a Contract which are described in Article IV of the Master Agreement.

Contract

Master Agreement, the Application, and the Participation and Payment Schedule.

Disabled

Means that the Beneficiary is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration. An individual shall not be considered to be disabled unless proof of the existence thereof in such form and manner as may be required by applicable regulations is furnished.

Member of the Family

Means the definition of that term in Section 529 of the Internal Revenue Code, as amended. Generally, this definition includes a Beneficiary's immediate family members. "Member of the Family" means an individual who is related to the Beneficiary as follows: a son or daughter, or a descendant of either; a stepson or stepdaughter; a brother, sister, stepbrother, or stepsister; the father or mother, or an ancestor of either; a stepfather or stepmother; a son or daughter or a brother or sister; a brother or sister of the father or mother; a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law; the spouse of the designated Beneficiary or the spouse of any individual described above; or a first cousin of the Beneficiary. For purposes of determining who is a "Member of the Family", a legally adopted child of an individual shall be treated as the child of such individual by blood. The terms "brother" and "sister" include half-brothers and half-sisters.

Participation and Payment Schedule

The document furnished by the Board to the Account Owner that provides the due dates and amount of Payments required of the Account Owner under the selected plan.

Payment

Means payment(s) required to be made under the Contract.

Resident

A person who is a resident of the Commonwealth of Virginia at the time an Application is submitted, and who is a U.S. citizen or legal resident alien. The term "Resident" also includes (i) military personnel and their dependents who are stationed in Virginia at the time the Contract is purchased or who claim Virginia as their domicile and who have authorized the withholding of Virginia income tax, and (ii) a corporation, partnership, trust, charitable organization, or any other person described in Section 7701(a)(1) of the Internal Revenue Code (26 U.S.C. Section 7701(a)(1)) and having significant contact with the Commonwealth of Virginia, as determined by the Board.

Tuition

The undergraduate in-state quarter, semester or term charges for tuition imposed by any two-year or four-year public institution of higher education in the Commonwealth of Virginia and all mandatory fees required as a condition of enrollment of all students at such institution. Undergraduate tuition at public institutions of higher education in Virginia includes the normal full-time course load for students enrolled in a general course of study. If the Virginia public institution imposes additional charges for a specific major or course of study, such as nursing or engineering, or for credits above the normal full-time course load, these additional costs are not covered.