(a) An educational services plan tuition contract entered into between the board and a purchaser shall allow the purchaser to purchase tuition units on behalf of a beneficiary at the price determined by the board pursuant to subsection (c) for the year in which the tuition unit is purchased. Each tuition unit purchased on behalf of a beneficiary shall entitle the beneficiary to an amount equal to one percent (1%) of the weighted average tuition during the academic term in which it is used. Each tuition unit shall cover the cost of the beneficiary’s tuition in an amount no greater than one percent (1%) of the weighted average tuition in effect at Tennessee’s four-year public universities at the time of use.

Terms Used In Tennessee Code 49-7-807

  • 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 an individual designated under a tuition contract as the individual entitled to apply tuition units purchased under the contract to the payment of that individual's undergraduate, graduate and professional tuition, and other educational costs. See Tennessee Code 49-7-802
  • Board: means the board of trustees of the college savings trust fund program described in this part. See Tennessee Code 49-7-802
  • Contract: A legal written agreement that becomes binding when signed.
  • Educational services plan: means a plan that permits individuals, associations, corporations, trusts or other organized entities to purchase a tuition unit or units under a tuition contract entered into between a purchaser and the board on behalf of a designated beneficiary that entitles the beneficiary to apply such units to the payment of that beneficiary's undergraduate, graduate and professional tuition, and other educational costs. See Tennessee Code 49-7-802
  • Purchaser: means an individual, association, corporation, trust, charitable organization or other such entity that enters into a tuition contract under this part for the purchase of a tuition unit or units on behalf of a beneficiary relative to the educational services plan. See Tennessee Code 49-7-802
  • 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 board. See Tennessee Code 49-7-802
  • Tuition unit: means a unit of the educational services plan purchased under §. See Tennessee Code 49-7-802
  • Weighted average tuition: means the tuition cost resulting from the following calculation:
    (A) Add the products of the annual undergraduate tuition at each Tennessee four-year public university multiplied by that institution's total number of undergraduate full-time equivalent students. See Tennessee Code 49-7-802
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b) “Weighted average tuition” means the tuition cost resulting from the following calculation:

(1) Add the products of the annual undergraduate tuition at each Tennessee four-year public university multiplied by that institution’s total number of undergraduate full-time equivalent students; and
(2) Divide the gross total of the products from subdivision (b)(1) by the total number of undergraduate full-time equivalent students attending Tennessee’s four-year public universities.
(c) The board shall develop a plan for the sale of tuition units. The board shall determine annually the weighted average tuition of Tennessee’s four-year public universities in the academic year that begins on or after August 1 of the then current calendar year, and shall establish the price of a tuition unit in the ensuing sales period. The price shall be based on sound actuarial principles, and shall, to the extent actuarially possible, reasonably approximate one percent (1%) of the weighted average tuition for the academic year, plus the costs of administering the educational services plan and any amount necessary to ensure the plan remains actuarially sound. The sales period to which the price applies shall consist of twelve (12) months, and the board shall establish the date on which the sales period begins. The board may impose and collect additional administrative fees and charges in connection with the sale of tuition units. To promote the purchase of tuition units and in accordance with actuarially sound principles, the board may adjust the sales price as part of incentive programs.
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