A. The commission on higher education [higher education department] shall conduct a thorough study to determine the feasibility of creating a prepaid higher education tuition program, which shall include requirements that:

(1) prepaid tuition contracts, once paid, will cover all tuition and required fees of the institution of higher education;

(2) payments for prepaid tuition contracts may be made either in a lump sum or in installments;

(3) the prepaid tuition contracts shall:

(a) allow purchasers to choose from payment plans that pay the tuition and required fees for either a community college, four-year or in-state, private post-secondary educational institution;

(b) allow for rollover of prepaid higher education tuition benefits from one plan to another, and that provide that benefits may be used at any community college, four-year or in-state, private post-secondary educational institution;

(c) include penalties for termination of the contract or default on any of the contract's terms or conditions; and

(d) include provisions that allow purchasers to change or switch beneficiaries;

(4) beneficiaries meet certain minimum eligibility requirements;

(5) when setting contract prices, the commission [department] consider:

(a) the amount and estimated rate of increase of tuition and fees at institutions of higher education;

(b) expected investment returns;

(c) estimated administrative costs; and

(d) the period between the date the contract is entered into and the date the beneficiary is projected to graduate from high school;

(6) allow for gifts or bequests either on behalf of a beneficiary or to the fund generally;

(7) institutions of higher education are either required to participate or that the commission [department] may specify how and when institutions of higher education become eligible to participate in the program;

(8) benefits under a prepaid tuition contract are excluded from any calculation of a beneficiary's state student-aid eligibility; and

(9) a program established pursuant to the requirements set forth in this section shall not obligate or encumber any money deposited in the state permanent fund, the severance tax bond fund or any money that is a part of a state-funded financial aid program.

B. The commission [department] shall report its findings to the appropriate interim legislative committee no later than October 15, 1997. The report shall include a recommendation from the commission [department] regarding the feasibility of implementing a prepaid higher education tuition program based on the requirements set forth in Subsection A of this section.

History: Laws 1997, ch. 206, § 1.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

For designation of the commission on higher education as the higher education department, see 9-25-4.1 NMSA 1978.