MPCT Frequently Asked Questions

Learn more about the MPCT interest calculation issue that may affect certain Account Holders who need to take a distribution.

The following frequently asked questions should be read in conjunction with and are limited by the full
Disclosure Statement. Many terms used in this section are defined in the Disclosure Statement.

Payments & Payment Options

Payments can be made by check, money order, electronic funds transfer on either an automatic monthly or one-time basis.

We reserve the right to downgrade or terminate an Account for missed payments and fees will be assessed and are the responsibility of the Account Holder.

Payments are due on the first of the month. Late fees will be assessed if no payment has been received within ten (10) days after a due date.

If an initial payment is missed and no payments are received for a newly opened Account, there will be 30, 60, and 90-day email notifications (along with the associated monthly fees) before a contract is involuntarily canceled and notification is sent to the Account Holder.

If an Account has had prior payments, but a payment is missed, there will be 30, 60, 90, 120, and 150-day email notifications (along with the associated monthly fees) before a contract is involuntarily downgraded or canceled and notification is sent to the Account Holder.

Automatic Downgrades. In situations where an Account is 180 days delinquent, the Account will be automatically downgraded within the same plan type (Community College or University, with 2 + 2 plans falling to the Community College plan type). If there is no downgrade option within the plan type, the Account will be involuntarily canceled and the Account Holder will have 90 days to reinstate the Account by bringing all overdue payments current along with payment of any fees incurred.

You may pay off your Account at any time. Payoff amounts will be less than your original total contract payments and may be requested by selecting Plan Details from the My Accounts tab when you log in to your Account.

Tuition Benefits

Benefits must be used to pay for a normal full-time (or half-time) course load for the number of semesters or years of undergraduate education specified in the Tuition plan purchased. You can start using Benefits provided the Initial Benefit Eligibility date has passed (i.e. the three-year minimum maturity period for a contract) and commencing on or after the Beneficiary's Projected College Enrollment Year.

Benefits Payable:

Maryland Public Colleges: If your Beneficiary attends a Maryland 4-year public college as a full-time student, we will pay the full in-state Tuition and Mandatory Fees for a University Plan, based on the plan purchased. If your Beneficiary attends a 2-year Maryland community college, we will pay the full in-county Tuition and Mandatory Fees for a Community College Plan, based on the plan purchased.

Private or Out-of-State: If your Beneficiary attends an Eligible Institution that is private or out-of-state as a full-time student, we will pay the actual Tuition each semester (or the equivalent) up to a maximum of one half of the Weighted Average Tuition in the tuition plan you purchased or your Minimum Benefit, whichever is greater. If your Tuition for the private or out-of-state Eligible Institution is less than the Weighted Average Tuition, you will only receive the Tuition. If Tuition is less than your Minimum Benefit however, you may submit documentation of Qualified Higher Education Expenses and receive reimbursement up to your Minimum Benefit.

The Weighted Average Tuition is the in-state or in-county Tuition and Mandatory Fees at each Maryland Public College times the number of full-time equivalent in-state or in-county students enrolled at that college, added together. This total is then divided by the number of full-time equivalent in-state or in-county students enrolled at all Maryland public colleges. There is a separate calculation for the 4-year public colleges and the 2-year public community colleges in Maryland. We calculate the Weighted Average Tuition once each year, typically in June, for the following Academic Year.

The Weighted Average Tuition for the 2023-2024 Academic Year is $10,877.24 for 4-year public colleges and $4,947.58 for community colleges.

The eligible Maryland Public Colleges and Universities that are paid as part of in the Prepaid College Trust in-state Tuition Benefit are:

You can view the Tuition and Mandatory Fees for each Maryland Public College by visiting the websites above.

The Beneficiary has the number of years purchased on the Account plus 10 years to use all Benefits. This time can be extended for active service in the U.S. military.

If your Beneficiary receives a scholarship, grant, or tuition remission, you may apply Excess Benefits to pay other Qualified Higher Education Expenses. When Excess Benefits are used to pay other Qualified Higher Education Expenses, we will pay the amount we would have otherwise paid the eligible education institution or the actual cost of the Qualified Higher Education Expenses, whichever is less.

Excess Benefits are always available for a Refund in accordance with the contract. Additionally, Excess Benefits are not subject to the requirement that a Beneficiary be enrolled at least half-time. Excess Benefits may also be rolled over to the Maryland College Investment Plan or another Qualified Tuition Plan.

The Trust will not pay for more than 15 credit hours for each semester (or the financial equivalent). The Trust will pay for a maximum of two semesters of Mandatory Fees (or the equivalent) for each year of Benefits purchased for a Beneficiary. If Tuition, Fees, or Qualified Higher Education Expenses are more than the Benefits paid under your Account, you or your Beneficiary is responsible for the difference.

Minimum Benefits means payments duly made under your Contract, minus Operating Expenses, plus a certain rate of return. See Article V - Benefits of the Disclosure Statement for further details on your Minimum Benefit Calculation.

If the total of Tuition and Mandatory Fees at an Eligible Institution is less than the Minimum Benefit, you may use the difference to pay for other Qualified Higher Education Expenses such as room and board and books, or they will be held on your Account as Excess Benefits for future use.

In order to receive Benefits, other than Excess Benefits, your Beneficiary must be enrolled at least half-time. Half-time is defined as at least one-half of the minimum number of credits necessary to be considered a full-time student by the Eligible Institution.

If your Beneficiary attends a Maryland Public College, we will pay one-half of the in-state or in-county Tuition and Mandatory Fees for a full-time student or the actual Tuition and Mandatory Fees charged by the Eligible Institution to the student, whichever is less. Under the Prepaid College Trust, the term Tuition means the actual Tuition and Mandatory Fees assessed to all students by an Eligible Institution as a condition of enrollment. Tuition does not include any fee that is assessed for a particular course taken, year of enrollment, academic status, course of study, residency status, or any other distinguishing factor used to determine a specific fee.

If your Beneficiary attends an Eligible Institution that is private or out of state, the Trust will pay one-half of the Benefit available, either the Minimum Benefit or the Weighted Average Tuition (WAT), up to a maximum of the actual Tuition charged. See the sections on Minimum Benefit or WAT for additional information. If the Benefit paid does not cover the entire Tuition cost to the student, you or your Beneficiary is responsible for the difference.

In order to use Benefits for summer/winter term courses, you must have Excess Benefits and your Beneficiary must be enrolled on at least a half-time basis as defined by the college.

After we’ve processed your documents (typically up to 5 - 7 days after submission), you can check your Benefits payment information in just three clicks:

1: Log in to your online Account

2: Select the Benefits tab

3: Select Claims History

Additionally, you will receive an email confirmation when your request is submitted and the issued Benefits Claims payment will be sent to your requested recipient along with a stub confirming the principal and earnings information.

Tax Benefits

Maryland taxpayers receive a maximum $2,500 deduction from their Maryland adjusted gross income annually per Account for payments made to the Prepaid College Trust. Payments made in excess of $2,500 per Account in a single year may be carried forward and deducted from your Maryland adjusted gross income in consecutive future years until the full amount contributed to the Account has been deducted, subject to the $2,500 annual limit.

Any Maryland taxpayer, including yourself as the Account Holder, along with other individuals such as a relative or a friend, who make contributions to your Account may be eligible to take the income deduction. Consult with your tax professional.

For additional information on Prepaid College Trust tax benefits for Maryland taxpayers, please refer to www.marylandtaxes.gov.

Account Rollover or Refund

Refunds are only given at your authorization under the following circumstances:

Death or Disability of the Beneficiary.

1. Beneficiary Enrolled at Eligible Institution. The refund will be the amount that would have otherwise been paid directly to the Eligible Institution, less any Benefits used.

2. Beneficiary Not Enrolled at Eligible Institution. If the Beneficiary has not started receiving Benefits and a Disability occurs, the refund will be equal to the Minimum Benefit calculation for the contract.

Scholarship, Grant or Tuition Remission. The refund will be up to the amount that would have otherwise been paid directly to the Eligible Institution.

Refunds are given under all other circumstances. The refunds discussed below include a financial penalty on Earnings in order to maintain the actuarial soundness of the Prepaid College Trust.

A Contract in existence for less than three years as measured from the first payment due date. The refund will equal the actual payments made plus 50% of the Earnings as applied to the contract payments, less Operating Expenses and any Benefits used.

A Contract in existence for three years or more as measured from the first payment due date. The refund will equal the actual payments made plus 100% of the Earnings applied to the contract payments, less Operating Expenses and any Benefits used.

A Medallion Signature Guarantee is a legally binding endorsement that ensures that your signature is genuine and that the financial company issuing the guarantee accepts liability for any forgery. Medallion Signature Guarantees can be obtained from some banks, savings institutions, and broker-dealers. While the STO reserves the right to require a Medallion Signature Guarantee at any time, it must be included on applicable forms in the following instances:

for all refund requests;

for payment requests of $25,000 or more;

when there is a request to send a check to an address not on file

Download and complete the Rollover Request Form on our website. The transferable amount for rollovers from the Prepaid College Trust to the Maryland College Investment Plan will equal the actual payments made to the Prepaid College Trust plus 100% of the Earnings applied to the contract payments, less Operating Expenses and any Benefits used, regardless of how long the Contract has been in effect.

For more information on how to roll over funds from the Maryland Prepaid College Trust  to the Maryland College Investment plan, click here.

Download and complete the Incoming Rollover Form to transfer assets for the same Beneficiary from another Qualified Tuition Program to the Prepaid College Trust.

This type of transfer is commonly referred to as a rollover. Rollovers for the same Beneficiary are restricted to one every 12 months. The Account Holder and/or the previous Qualified Tuition Program must provide the Prepaid College Trust with an accurate allocation of principal and earnings on the previous account for application to the new Account, otherwise the entire rollover contribution will be treated as Earnings.

Account Services & Changes

As of June 1, 2023, prior to using any Benefits and subject to the limitation described below, you may convert your Contract from one tuition plan to a different tuition plan. Upon each request for a contract conversion, the contract will be revalued to determine whether additional contract payments would be required or if a refund should be made. Only conversions that do not result in the payment of additional contract amounts will be allowed to proceed.

Please be advised that a conversion may have tax consequences. Please consult with your tax professional for specific details.

To convert you plan to another type, complete section 7 and 9 of the Account Maintenance Form and log in to your Account to upload the completed form for processing.

Download and complete Sections 7 and 9 of the Account Maintenance Form and log in to your Account to upload the completed form for processing.

Yes. You can set up Automatic Monthly Payments by logging into your Account and selecting Recurring Payments (AMC) from the Financials tab. Payments must be made in U.S. dollars and we reserve the right, subject to applicable law, to restrict distribution of that payment from your Account for up to 10 days after the funds are deposited. You may change payment methods at any time by logging in to your Account.

To make an address change log in to your Account and select “Account Holder Information” and/or “Beneficiary Information” from the Profile tab.

You may change the Beneficiary to a Member of the Family of the Beneficiary (as defined in the Disclosure Statement) at any time. We will then calculate the new payment amount given the change, if any, in projected college enrollment or initial eligibility year. Please note that you may have to make an additional lump sum payment to bring the plan current for the new plan type or, in cases where the cost is lower, you may have a refund available.

Beneficiary changes may be requested by completing the Account Maintenance Form.

If you have overpaid, you may take a refund as provided in Article VI of the Contract in the Disclosure Statement or transfer the overpayment to another Member of the Family of the original Beneficiary. A refund may have negative federal and/or state tax consequences. If you change the Beneficiary, all terms and conditions of the contract continue to apply, even though the original Beneficiary has been changed.

If you change the Beneficiary to someone who is not a Member of the Family of the Beneficiary, there will be tax consequences. Please consult with a tax professional for further details.

You may transfer control of your contract to a new Account Holder unless your Account has been funded with the proceeds from an UGMA/UTMA account. Account Holder changes may be requested by completing the Account Maintenance Form. Your right of control may not be sold, transferred, used as collateral, or pledged or exchanged for money or anything of value. We may require affidavits or other evidence to establish that such a transfer is non-financial in nature. Your right of control may also be transferred under an appropriate court order as part of divorce proceedings. If you transfer control of your contract to a new Account Holder, the new Account Holder must agree to be bound by the terms and conditions of the contract.

Click here to access the Account login page.

No. The Prepaid College Trust is not like a mutual fund investment. Your Account does not have a daily net asset value. The Prepaid College Trust is a pooled fund that invests payments made by Account Holders to provide future Tuition Benefits. The value of your Account will ultimately be determined by the Benefits that your Beneficiary receives based on the college or university that he or she attends. Your Account may also be valued when you make certain changes to your Account such as requesting a Refund or initiating a transfer. In these instances, your Account will be valued as of the date of the transaction and as specified in the contract.