Chapter 224

224.48(7)(a)5. 5. If the beneficiary is awarded a scholarship, tuition waiver or similar subsidy that cannot be converted into cash by the beneficiary, refund to the person who entered into the contract, upon the person’s request, an amount equal to the value of the tuition units that are not needed because of the scholarship, waiver or similar subsidy and that would otherwise have been paid by the department on behalf of the beneficiary during the semester in which the beneficiary is enrolled.

224.48(7)(b) (b) The department shall determine the method and schedule for the payment of refunds under this subsection.

224.48(7m) (7m) Tuition unit value adjustment; refund adjustment.

224.48(7m)(a) (a) The department may adjust the value of a tuition unit based on the actual earnings attributable to the tuition unit less the costs of administering the program under this section that are attributable to the tuition unit if any of the following applies:

224.48(7m)(a)1. 1. The individual named as the beneficiary in a contract under sub. (3) wishes to use the tuition unit for the payment of tuition in a year other than the anticipated academic year of attendance, as specified in the contract.

224.48(7m)(a)2. 2. The individual named as the beneficiary in a contract under sub. (3), or the person who entered into the contract, wishes to receive a refund under sub. (7) in a year other than the anticipated academic year of the beneficiary’s attendance, as specified in the contract.

224.48(7m)(b) (b) The department may not increase the value of a tuition unit under par. (a) to an amount that exceeds the value of a tuition unit that was purchased at a similar time, held for a similar period and used or refunded in the anticipated academic year of the beneficiary’s attendance, as specified in the contract.

224.48(7m)(c) (c) The department may promulgate rules imposing or increasing penalties for refunds under sub. (7) (a) if the department determines that such rules are necessary to maintain the status of the program under this section as a qualified state tuition program under section 529 of the Internal Revenue Code, as defined in s. 71.01 (6).

224.48(8) (8) Exemption from garnishment, attachment and execution. Moneys deposited in the tuition trust fund and a beneficiary’s right to the payment of tuition, fees and the costs described in sub. (5) (a) under this section are not subject to garnishment, attachment, execution or any other process of law.

224.48(9) (9) Contract with actuary. The department shall contract with an actuary or actuarial firm to evaluate annually whether the assets in the tuition trust fund are sufficient to meet the obligations of the department under this section and to advise the department on setting the price of a tuition unit under sub. (2) (b).

224.48(10) (10) Reports.

224.48(10)(a) (a) Annually, the department shall submit a report to the governor, and to the appropriate standing committees of the legislature under s. 13.172 (3), on the program under this section. The report shall include any recommendations for changes to the program that the department determines are necessary to ensure the sufficiency of the tuition trust fund to meet the department’s obligations under this section.

224.48(10)(b) (b) The department shall submit a quarterly report to the state investment board projecting the future cash flow needs of the tuition trust fund. The state investment board shall invest moneys held in the tuition trust fund in investments with maturities and liquidity that are appropriate for the needs of the fund as reported by the department in its quarterly reports. All income derived from such investments shall be credited to the fund.

224.48(11) (11) Construction.

224.48(11)(a) (a) Nothing in this section guarantees an individual’s admission to, retention by or graduation from any institution of higher education.

224.48(11)(b) (b) The requirements to pay tuition, fees and the costs of room and board, books, supplies and equipment under sub. (5) and to make refunds under sub. (7) are subject to the availability of sufficient assets in the tuition trust fund.

224.48(11m) (11m) Financial aid calculations. The value of tuition units shall not be included in the calculation of a beneficiary’s eligibility for state financial aid for higher education if the beneficiary notifies the higher educational aids board and the institution of higher education that the beneficiary is planning to attend that he or she is a beneficiary of a contract under this section and the contract owner agrees to release to the higher educational aids board and the institution of higher education information necessary for the calculation under this subsection.

224.48(12) (12) Additional duties and powers.

224.48(12)(a) (a) The department shall do all of the following:

224.48(12)(a)1. 1. Annually publish a list of the institutions of higher education located in this state and the number of tuition units necessary to pay for one year of full-time attendance as a resident undergraduate at each institution.

224.48(12)(a)2. 2. Actively promote the program under this section.

224.48(12)(a)3. 3. Promulgate rules to implement and administer this section.

224.48(12)(b) (b) The department may do any of the following:

224.48(12)(b)1. 1. Contract with any person for the management and operation of the program or any part of the program under this section.

224.48(12)(b)2. 2. Keep personal and financial information pertaining to a purchaser of tuition units or a beneficiary of tuition units closed to the public.

224.48(13) (13) Program termination. If the department determines that the program under this section is financially infeasible, the department shall discontinue entering into contracts under sub. (3) and discontinue selling tuition units under sub. (4).

224.48 History History: 1995 a. 403; 1997 a. 27, 158; 1999 a. 9 ss. 52 to 62; Stats. 1999 s. 14.63; 1999 a. 44; 2001 a. 7, 16; 2011 a. 32 s. 75; Stats. 2011 s. 16.64; 2017 a. 59 s. 148, 1704; Stats. 2017 s. 224.48.

224.50 224.50 College savings program.

224.50(1) (1) Definitions. In this section:

224.50(1)(a) (a) “Account owner” means a person who establishes a college savings account under this section.

224.50(1)(b) (b) “Board” means the college savings program board.

224.50(1)(c) (c) “Department” means the department of financial institutions.

224.50(2) (2) Duties of the board. The board shall do all of the following:

224.50(2)(a) (a) Except as provided in s. 224.51, establish and administer a college savings program that allows an individual, trust, legal guardian, or entity described under 26 USC 529 (e) (1) (C) to establish a college savings account for the purposes set forth in 26 USC 529.

224.50(2)(b) (b) Ensure that the college savings program meets the requirements of a qualified state tuition plan under 26 USC 529.

224.50(2)(c) (c) Establish investment guidelines for contributions to college savings accounts and pay distributions to beneficiaries and eligible educational institutions.

224.50(2)(d) (d) Provide to each account owner, and to persons who are interested in establishing a college savings account, information about current and estimated future higher education costs, levels of participation in the college savings program that will help achieve educational funding objectives and availability of and access to financial aid.

224.50(2)(e) (e) Promulgate rules to implement and administer this section, including rules that determine whether a withdrawal from a college savings account is a qualified or nonqualified withdrawal, as defined under 26 USC 529, and that impose more than a de minimis penalty, as defined under 26 USC 529, for nonqualified withdrawals.

224.50(2)(f) (f) Seek rulings and guidance from the U.S. department of the treasury, the internal revenue service and the securities and exchange commission to ensure the proper implementation and administration of the college savings program.

224.50(2)(g) (g) Ensure that if the department changes vendors, the balances of college savings accounts are promptly transferred into investment instruments as similar to the original investment instruments as possible.

224.50(2)(h) (h) Keep personal and financial information pertaining to an account owner or a beneficiary closed to the public, except that the board may release to the appropriate state agency information necessary in determining a beneficiary’s eligibility for state financial aid for higher education.

224.50(2)(i) (i) Before December 31 of each year, beginning in 2015, ensure that the account balance limitation under sub. (3) (bm) is increased for the subsequent year. The annual increase shall be equal to a percentage that is not less than the most recently published national average tuition and fees percentage increase at private, nonprofit 4-year institutions, as determined by the College Board, or such other nationally reputable entity, and shall be subject to the requirements under 26 USC 529 that pertain to the prohibition on excess contributions.

224.50(3) (3) Account owners; beneficiaries; contributions; termination of savings accounts.

224.50(3)(a) (a) An account owner may do all of the following:

224.50(3)(a)1. 1. Contribute to a college savings account or authorize any other person to contribute to the account.

224.50(3)(a)2. 2. Select a beneficiary of a college savings account.

224.50(3)(a)3. 3. Change the beneficiary of a college savings account to a family member, as defined under 26 USC 529, of the previous beneficiary.

224.50(3)(a)4. 4. Transfer all or a portion of a college savings account to another college savings account whose beneficiary is a member of the family.

224.50(3)(a)5. 5. Designate a person other than the beneficiary as a person to whom funds may be paid from a college savings account.

224.50(3)(a)6. 6. Receive distributions from a college savings account if no other person is designated.

224.50(3)(b) (b) An individual may be the beneficiary of more than one college savings account, and an account owner may be the beneficiary of a college savings account that the account owner has established.

224.50(3)(bm) (bm) Beginning on August 1, 2015, no contribution may be made to an account if the contribution would cause the account balance of a beneficiary’s account, or the combined balance of all accounts of a beneficiary, to exceed $425,000. This contribution limitation applies to all accounts that are established on and after that date, and to all accounts that are in existence on that date that have not yet reached the balance limit specified in this paragraph, subject to the annual increase described in sub. (2) (i).

224.50(3)(c) (c) The board shall establish a minimum initial contribution to a college savings account that may be waived if the account owner agrees to contribute to a college savings account through a payroll deduction or automatic deposit plan. The board shall ensure that any such plan permits the adjustment of scheduled deposits because of a change in the account owner’s economic circumstances or a beneficiary’s educational plans.

224.50(3)(d) (d) An account owner under this section may terminate his or her college savings account if any of the following occurs:

224.50(3)(d)1. 1. The beneficiary dies or is permanently disabled.

224.50(3)(d)2. 2. The beneficiary graduates from high school but is unable to gain admission to an institution of higher education after a good faith effort.

224.50(3)(d)3. 3. The beneficiary attended an institution of higher education but involuntarily failed to complete the program in which he or she was enrolled.

224.50(3)(d)4. 4. The beneficiary is at least 18 years old and one of the following applies:

224.50(3)(d)4.a. a. The beneficiary has not graduated from high school.

224.50(3)(d)4.b. b. The beneficiary has decided not to attend an institution of higher education.

224.50(3)(d)4.c. c. The beneficiary attended an institution of higher education but voluntarily withdrew without completing the program in which he or she was enrolled.

224.50(3)(d)5. 5. Other circumstances determined by the board to be grounds for termination.

224.50(3)(e) (e) The board may terminate a college savings account if any portion of the college savings account balance remains unused 10 years after the anticipated academic year of the beneficiary’s initial enrollment in an eligible educational institution.

224.50(4) (4) Contracts with professionals. The board may enter into a contract for the services of accountants, attorneys, consultants and other professionals to assist in the administration and evaluation of the college savings program.

224.50(5) (5) Report. Annually, the board shall submit a report to the governor, and to the appropriate standing committees of the legislature under s. 13.172 (3), on the performance of the college savings program, including any recommended changes to the program.

224.50(6) (6) Construction. Nothing in this section guarantees an individual’s admission to, retention by or graduation from any institution of higher education; a rate of interest or return on a college savings account; or the payment of principal, interest or return on a college savings account.

224.50(7) (7) Exemption from garnishment, lien, levy, attachment and execution; security for loan.

224.50(7)(a) (a) An account established under this section is not subject to garnishment, lien, levy, attachment, execution or other process of law.

224.50(7)(b) (b) No interest in a college savings account may be pledged as security for a loan.

224.50(8) (8) Financial aid calculations. The balance of a college savings account shall not be included in the calculation of a beneficiary’s eligibility for state financial aid for higher education if the beneficiary notifies the higher educational aids board and the eligible educational institution that the beneficiary is planning to attend that he or she is a beneficiary of a college savings account and if the account owner agrees to release to the higher educational aids board and the eligible educational institution information necessary for the calculation under this subsection.

224.50 History History: 1999 a. 44; 2001 a. 7, 38; 2011 a. 32 s. 76; Stats. 2011 s. 16.641; 2013 a. 227; 2015 a. 55; 2017 a. 59 ss. 149, 1705; Stats. 2017 s. 224.50; 2017 a. 231; 2023 a. 148.

224.50 Cross-reference Cross-reference: See also ch. DFI-CSP 1, Wis. adm. code.

224.51 224.51 College savings program vendor.

224.51(1g) (1g) In this section, “department” means the department of financial institutions.

224.51(1m) (1m) The department shall determine the factors to be considered in selecting a vendor of the program under s. 224.50, which shall include:

224.51(1m)(a) (a) The person’s ability to satisfy record-keeping and reporting requirements.

224.51(1m)(b) (b) The fees, if any, that the person proposes to charge account owners.

224.51(1m)(c) (c) The person’s plan for promoting the college savings program and the investment that the person is willing to make to promote the program.

224.51(1m)(d) (d) The minimum initial contribution or minimum contributions that the person will require.

224.51(1m)(e) (e) The ability and willingness of the person to accept electronic contributions.

224.51(1m)(f) (f) The ability of the person to augment the college savings program with additional, beneficial services related to the program.

224.51(2) (2) The department shall solicit competitive sealed proposals under s. 16.75 (2m) from nongovernmental persons to serve as vendor of the college savings program. The department shall select the vendor based upon factors determined by the department under sub. (1m).

224.51(3) (3) The contract between the department and the vendor shall ensure all of the following:

224.51(3)(a) (a) That the vendor reimburses the state for all administrative costs that the state incurs for the college savings program.

224.51(3)(b) (b) That a firm of certified public accountants selected by the vendor annually audits the college savings program and provides a copy of the audit to the college savings program board.

224.51(3)(c) (c) That each account owner receives a quarterly statement that identifies the contributions to the college savings account during the preceding quarter, the total contributions to and the value of the college savings account through the end of the preceding quarter and any distributions made during the preceding quarter.

224.51(3)(d) (d) That the vendor communicate to the beneficiary and account owner the requirements of s. 224.50 (8).

224.51 History History: 1999 a. 44; 2001 a. 38 s. 12; 2011 a. 32; 2017 a. 59 ss. 114 to 117, 1706; Stats. 2017 s. 224.51.

224.52 224.52 Repayment to the general fund.