The Harold Alfond College Challenge (“HACC”) was established by the Alfond Scholarship Foundation (“ASF”). The Finance Authority of Maine (“FAME”) assists ASF with the administration of the HACC. ASF will designate $500 (“Alfond Grant”) to each eligible recipient as follows:
A. To a child born on or after January 1, 2013 who is reported by the Maine Bureau of Vital Records (“BVR”) as a Maine resident birth, and for whom the Alfond Grant has not already been linked to a NextGen College Investing Plan (NextGen) account naming the child as the beneficiary of the account. Such a child will be deemed eligible for the Alfond Grant after the BVR records are received by FAME. If a NextGen account is opened for such a child, the Alfond Grant may be linked to the NextGen account.
B. To a child born on or after January 1, 2013, who, if not reported by BVR as a Maine resident birth, can prove Maine residency at birth with documentation acceptable to FAME and ASF. For such a child, the Alfond Grant will be awarded, upon such proof of residency, when the child enrolls in an eligible institution of higher education (the “school”) and requests payment of the grant to the school; or linked to a NextGen account when such an account is opened for the child. Such a child may also be deemed eligible for the Alfond Grant when the child is otherwise identified to FAME and proof of residency has been provided.
C. To a child who was not born a Maine resident, but for whom a NextGen is opened on or before the child’s first birthday, and the child is a Maine resident at the time of account opening. For such a child, the Alfond Grant will be linked to the NextGen account established for the child.
2. Important Information.
A. Neither the Alfond Grant nor any earnings thereon are, at any time, the property of the recipient or his/her parents or legal guardians. The Alfond Grant, including any earnings thereon, is owned by ASF until paid to an eligible institution of higher education for the qualified higher education expenses of the recipient.
B. Alfond Grants are invested by ASF in its sole discretion. Neither the recipient nor his/her parents or legal guardians may direct the investment of the Alfond Grant.
C. Only one Alfond Grant is available per recipient. The Alfond Grant is non-transferrable.
D. When the student enrolls in an eligible institution of higher education (“school”) and incurs qualified higher education expenses, payment of the Alfond Grant, including any earnings thereon, must be requested. Payment will only be made to the school. Payment requests must be made to FAME in the manner proscribed by ASF and FAME from time to time, and will require the provision of certain personal information of the student (and/or a parent or legal guardian depending upon the circumstances) including but not limited to valid social security numbers or U.S. taxpayer identification numbers.
E. Only one payment request will be allowed. The Alfond Grant will not be paid in multiple disbursements. If the request is not for the full amount of the grant, the balance is forfeited.
F. The Alfond Grant may only be used to pay the qualified higher education expenses of the recipient at a qualified institution of higher education. “Qualified higher education expenses” and “eligible institution of higher education” are as defined in the Internal Revenue Code of 1986, as amended. If required by FAME or ASF, the recipient must certify upon use of the grant that it is being used to pay qualified higher education expenses of the recipient at an institution of higher education.
G. The Alfond Grant, including any earnings thereon, is forfeited if not used by the recipient’s 28th birthday, or if the recipient dies before the grant has been paid out.
H. Earnings on Alfond Grants, if any, are as calculated by FAME, at the discretion of FAME and ASF, and may not represent actual earnings, if any, on ASF’s investment. Neither the recipient nor his/her parents or legal guardians have any right to any particular rate of return.
I. Using the name and address and other data obtained from BVR, FAME will contact the recipient’s birth mother with information about the Alfond Grant and NextGen. FAME may also use any additional or different contact information provided to FAME by such person. If a NextGen account is opened for the child, only the account owner will thereafter receive such information. A birth mother receiving such communications may at any time contact FAME at 1-800-228-3734 to request that communications be ceased.
J. ASF may at any time modify, suspend or terminate the Alfond Grant. ASF may revoke a grant if it is determined that the information upon which the grant was awarded was erroneous or fraudulent.
3. Tax Consequences.
The Alfond Grant has been designed so that the grant, including any earnings, used for certain qualified higher education expenses will be treated as a scholarship as defined by the Internal Revenue Code. The Alfond Grant can be used for tuition, fees, certain room and board expenses, books, supplies and certain equipment. However, any portion of the grant used as payment for room and board costs may be subject to federal and/or state income tax. Similarly, any portion of grant awards used to pay for qualified higher education expenses at schools not eligible for Title IV financial aid may not be eligible for federal and/or state tax-exempt treatment. Notwithstanding the design of the grant program, the Internal Revenue Service could take the position that grants are subject to federal income taxation in the year the grant is awarded or the year in which the funds are withdrawn. Awardees should consult their own tax advisor regarding the tax treatment of grant funds.
(See also HACC Terms and Conditions applicable to NextGen accounts , available at www.famemaine.com/nextgen).