What happens if the beneficiary chooses not to attend college?
Prepaid benefits are valid for 10 years after the beneficiary graduates from high school. Since many students do not enroll in college immediately after high school graduation, the account owner may want to keep the contract while the student sorts out his or her postsecondary options. If the beneficiary does not attend college, the account owner may cancel the contract and request a refund. In this case, the account owner will receive a full refund of payments made to the plan minus a cancellation fee of $50 or 50 percent of monies paid in, whichever is less, and any outstanding fees. (This cancellation fee is waived if the account owner has held the contract for more than two years.) The contract may also be transferred to a “family member” of the original beneficiary. Please see “Account Owner Eligibility” for guidelines.
