La. Admin. Code tit. 28 § VI-107

Current through Register Vol. 50, No. 9, September 20, 2024

Section VI-107 - Applicable Definitions

A. Words and terms not otherwise defined in these rules shall have the meanings ascribed to such words and terms in this Section. Where the masculine is used in these rules, it includes the feminine, and vice versa; where the singular is used, it includes the plural, and vice versa.

Account Owner-the person(s), independent student, organization or group that completes the START Saving Program owner's agreement on behalf of a beneficiary and is the account owner of record of all funds credited to the account.

Beneficiary-the person named by the account owner in the Education Savings Account (ESA) owner's agreement or the person named by the LATTA when authorized to make such a designation by the owner of an account that is classified under §303. A.6 as the individual entitled to apply the account balance, or portions thereof, toward payment of their qualified higher education expenses.

Beneficiary's Family-for the purpose of §303. A.6 one of the following persons:

a. the beneficiary's parent(s) or court ordered custodian; or

b. a person who claims the beneficiary as a dependent on his or her federal income tax return for the previous year; or

c. a person who certified that the beneficiary lives with him, that he provides more than 50 percent of the beneficiary's support for the previous year and that he was not required to file an income tax return for the previous year.

Current Value-the value of an education savings account at a given point in time.

a. The current value of fixed earnings investment options includes the accumulated value of the principal deposited, earnings on deposits, earnings enhancements (EEs) allocated to the account and the earnings on the EEs.

b. The current value of variable earnings investment options includes the number of units in the investment option purchased multiplied by the current value of each unit plus the earnings enhancements (EEs) allocated to the account and the earnings on the EEs. This value may be more or less than the amount originally deposited.

Deposits-the actual amount of money received from an account owner for investment in an education savings account. Deposits do not include earnings on deposits nor earnings enhancements or interest earned thereon.

Disabled or Disability-an individual who is considered to be disabled because he/she 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 disabled unless he furnishes proof of the existence thereof in such form and manner as the LATTA may require.

Earnings Enhancement (EE)-a payment allocated to an ESA on behalf of the beneficiary of the account by the state. The amount of the annual EE is calculated based upon the classification of an account, the annual federal adjusted gross income of the account owner, and total annual deposits of principal into an ESA, including deposits in fixed earning and variable earnings options. EEs and the interest earned thereon may only be used to pay the beneficiary's qualified higher education expenses, or portion thereof, at an eligible educational institution and cannot be refunded.

Earnings Enhancement Cap-the maximum of deposits in an account for which earnings enhancements will be paid. The earnings enhancement cap is reached when an account has a current value that is equal to or exceeds five times the annual qualified higher education expenses at the highest cost Louisiana public college or university, projected to the scheduled date of first enrollment. The projected qualified higher education expenses at each eligible educational institution shall be updated by the administering agency. On the date of the beneficiary's first enrollment in an eligible educational institution, the earnings enhancement cap will be fixed at five times the annual qualified higher education expenses at the highest cost Louisiana public college or university, for the academic year of enrollment or the projected amount, whichever is greater.

Education Savings Account (ESA)-a savings account established by a natural person or a legal entity to pay qualified higher education expenses of the designated beneficiary.

Educational Term-a semester, quarter, term, summer session, inter-session, or an equivalent unit.

Eligible Educational Institution-either:

a. a state college or university or a technical college or institute or an independent college or university located in this state that is approved by the U.S. Secretary of Education to participate in a program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1088), as amended; or

b. a public or independent college or a university located outside this state that is approved by the U.S. secretary of education to participate in a program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1088), as amended; or

c. a Louisiana licensed proprietary school, licensed pursuant to R.S. chapter 24-A of title 17, and any subsequent amendments thereto and is eligible to participate in a program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1088), as amended.

d. beginning in the 2018 academic year, a proprietary school located outside the state of Louisiana that is licensed by an out of state public postsecondary education board, is accredited by a recognized national or regional accrediting body, and is eligible to participate in a program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1088), as amended.

False or Misleading Information-a statement or response made by a person, which is knowingly false or misleading, and made for the purpose of establishing a program account and/or receiving benefits to which the person would not otherwise be entitled.

Fixed Earnings-the placement of all deposits in an ESA, including the interest earned thereon, in investments that normally provide a fixed rate of return for a specific period of time.

Independent Student-is a person who is defined as an independent student by the Higher Education Act of 1965 (20 U.S.C. 1088) (HEA), as amended, and if required, files an individual federal income tax return in his/her name and designates him/herself as the beneficiary of an ESA.

a. The HEA defines independent student as a student who:

i. reached 24 years of age prior to January of the year preceding the academic year for which the student is applying for aid;

ii. is a veteran of the U.S. Armed Forces, including a student who was activated to serve in Operation Desert Storm or is currently serving on active duty in the Armed Forces for other than training purposes;

iii. is an orphan, in foster care, or a ward of the court or was in foster care or was a ward of the court until the individual reached the age of 18;

iv. has legal dependents other than a spouse;

v. is a graduate or professional student;

vi. is married; or

vii. has been determined independent by a financial aid officer exercising professional judgment in accordance with applicable provisions of the HEA.

b. An independent student may only open an account as an account owner if he/she is 18 years or older.

Legal Entity-juridical person including, but not limited to, groups, trusts, estates, associations, organizations, partnerships, and corporations that are incorporated, organized, established, or authorized to conduct business in accordance with the laws of one or more states or territories of the United States. A natural person is not a legal entity.

Louisiana Education Tuition and Savings Fund (the Fund)-is a special permanent fund maintained by the Louisiana state treasurer for the purpose of the START Saving Program and is the account into which all initial deposits made to ESAs are deposited. The fund includes the Savings Enhancement Fund, which is a special sub-account designated to receive earnings enhancements appropriated by the state, and interest earned thereon.

Louisiana Office of Student Financial Assistance (LOSFA)-the agency of state government responsible for administering the START Saving Program under the direction of the Louisiana Tuition Trust Authority.

Louisiana Resident-

a. any person who resided in the state of Louisiana on the date of the application and who has manifested intent to remain in the state by establishing Louisiana as legal domicile, as demonstrated by compliance with all of the following:

i. if registered to vote, is registered to vote in Louisiana;

ii. if licensed to drive a motor vehicle, is in possession of a Louisiana driver's license;

iii. if owning a motor vehicle located within Louisiana, is in possession of a Louisiana registration for that vehicle;

iv. if earning an income, has complied with state income tax laws and regulations;

b. a member of the Armed Forces stationed outside of Louisiana who claims Louisiana on his/her official DD Form 2058 as his/her legal residence for tax purposes, and is in compliance with state income tax laws and regulations, shall be considered eligible for program participation;

c. a member of the Armed Forces stationed in Louisiana under permanent change of station orders shall be considered eligible for program participation;

d. persons less than 21 years of age are considered Louisiana residents if they reside with and are dependent upon one or more persons who meet the above requirements;

e. a legal entity is considered to be a Louisiana resident if it is incorporated, organized, established or authorized to conduct business in accordance with the laws of Louisiana or registered with the Louisiana Secretary of State to conduct business in Louisiana and has a physical place of business in Louisiana.

Louisiana Tuition Trust Authority (LATTA)-the statutory body responsible for the administration of the START Saving Program.

Maximum Allowable Account Balance-$500,000.

Member of the Family (with respect to the designated beneficiary)-

a. the spouse of such beneficiary; or

b. an individual who bears one of the following relationships to such beneficiary:

i. a son or daughter of the beneficiary, or a descendant of either;

ii. a stepson or stepdaughter of the beneficiary;

iii. a brother, sister, stepbrother, or stepsister of the beneficiary;

iv. the father or mother of the beneficiary, or an ancestor of either;

v. a stepfather or stepmother of the beneficiary;

vi. a son or daughter of a brother or sister of the beneficiary;

vii. a brother or sister of the father or mother of the beneficiary; or

viii. a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law of the beneficiary; or

ix. a first cousin of the beneficiary; or

c. the spouse of an individual listed in Clauses b.i-viii.

Natural Person-a human being.

Other Person (with respect to any designated beneficiary)-any person, other than the beneficiary, whether natural or juridical, who is not a member of the family, including but not limited to individuals, groups, trusts, estates, associations, organizations, partnerships, corporations, and custodians under the Uniform Transfer to Minors Act (UTMA).

Owner's Agreement-the agreement for program participation that the account owner completes and signs. It incorporates, by reference, R.S. 17:3091 et seq., and the rules promulgated by the LATTA to implement this statutory provision and any other state or federal laws applicable to the agreement and the terms and conditions as set forth therein.

Person-a human being or a juridical entity.

Qualified Education Loan-any indebtedness incurred by the taxpayer solely to pay qualified higher education expenses:

a. which are incurred on behalf of the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred;

b. which are paid or incurred within a reasonable period of time before or after the indebtedness is incurred; and

c. which are attributable to education furnished during a period during which the recipient was an eligible student.

Qualified Higher Education Expenses-

a. tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a designated beneficiary at an eligible educational institution; and

b. room and board; and

c. expenses for special needs services in the case of a special needs beneficiary, which are incurred in connection with such enrollment or attendance; and

d. for the calendar years 2009 and 2010 only, expenses paid or incurred for the purchase of any computer technology or equipment or Internet access and related services, if such technology, equipment, or services are to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution, but shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominately educational in nature;

e. for calendar year 2015 and thereafter, expenses for the purchase of computer or peripheral equipment, computer software, or Internet access and related services, if such equipment, software, or services are to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution, but shall not include expenses for computer software designed for sports, games, or hobbies unless the software is predominately educational in nature.

f. for calendar year 2019 and thereafter, expenses for fees, books, supplies, and equipment required for the participation of the designated beneficiary in an apprenticeship program which is registered and certified with the United State Secretary of Labor under section 1 of the National Apprenticeship Act.

g. for calendar year 2019 and thereafter, a maximum of $10,000 per individual for the payment of principal and/or interest on a qualified education loan of the designated beneficiary or a sibling of the designated beneficiary.

Rate of Expenditure-the rate (see §309. B) per educational term at which the EEs may be disbursed from an ESA to pay for the beneficiary's qualified higher education expenses at an eligible educational institution. For each disbursement requested by an account owner, EEs and the earnings thereon will be disbursed from the account in the same ratio that they bear to the current value of the account.

Redemption Value-the cash value of the money in an ESA invested in a fixed earnings option that are attributable to the sum of the principal deposited and the earnings on principal authorized to be credited to the account by the LATTA, less any disbursements and refunds. The redemption value does not include any EEs allocated to the account or the earnings on EEs. Redemption value is not applicable to an ESA invested in variable earnings.

Refund Recipient-the person designated by the account owner in the START Saving Program owner's agreement or by operation of law to receive refunds from the account. The refund recipient can only be the account owner or the beneficiary.

Room and Board-the reasonable cost for the educational term incurred by the designated beneficiary for room and board while attending an eligible educational institution on at least a half time basis, not to exceed the maximum amount included for room and board for such period in the cost of attendance (as currently defined in §472 of the Higher Education Act of 1965, 20 U.S.C. 1087ll) as determined by the eligible educational institution for such period, or if greater, the actual invoice amount the student residing in housing owned or operated by the eligible education institution is charged by such institution for room and board.

Saving Enhancement Fund-the sub-account established within the Tuition and Savings Fund by the State Treasurer to receive funds appropriated by the legislature or donated from any other source for the purpose of funding EEs.

Scheduled Date of First-Enrollment (for a dependent beneficiary)-the month and year in which the beneficiary turns 18 years of age. For an independent student over the age of 18, the scheduled date of first-enrollment is the date the account is opened. This date is used to determine eligibility for EEs. See the term earnings enhancement cap.

Special Needs Services and Beneficiary-services provided to a beneficiary because the student has one or more disabilities.

Trade Date-the date that a deposit to an investment option that includes variable earnings is assigned a value in units, the date a disbursement or refund from an investment option that includes variable earnings is assigned a value, or the date of a change in investment options that includes variable earnings is assigned a value, whichever is applicable.

Tuition-the mandatory educational charge required as a condition of enrollment and is limited to undergraduate enrollment. It does not include non-residence fees, laboratory fees, room and board or other similar fees and charges.

Variable Earnings-refers to that portion of funds in an ESA, invested in equities, bonds, short-term fixed income investments or a combination of any of the three.

Variable Earnings Transaction Fund-the subaccount established within the Louisiana Education Tuition and Savings Fund to receive funds as directed by rule.

La. Admin. Code tit. 28, § VI-107

Promulgated by the Tuition Trust Authority, Office of Student Financial Assistance, LR 23:712 (June 1997), amended LR 24:1268 (July 1998), LR 25:1794 (October 1999), LR 26:2260 (October 2000), LR 27:37 (January 2001), LR 27:1222 (August 2001), LR 27:1876 (November 2001), LR 28:450 (March 2002), LR 28:777 (April 2002), LR 28:2334 (November 2002), LR 29:556 (April 2003), LR 30:786 (April 2004), LR 30:1169 (June 2004), LR 30:2302 (October 2004), LR 31:639 (March 2005), LR 32:1433 (August 2006), LR 32:2240 (December 2006), LR 33:443 (March 2007), LR 34:1885 (September 2008), LR 35:1491 (August 2009), LR 38:3162 (December 2012), Amended LR 421071 (7/1/2016), Amended LR 441877 (10/1/2018), Amended LR 46, Amended by LR 461222 (9/1/2020).

AUTHORITY NOTE: Promulgated in accordance with R.S. 17:3091-3099.2.