If my child receives a scholarship, does not plan to attend college or has money left over after completion of his/her education, what becomes of the money in the account?

If the beneficiary does not use all or some of the monies in his/her START account, the funds may be transferred to an account for another beneficiary who is a family member of the original beneficiary, or the funds may be refunded. If the monies are refunded, the earnings included in the refunded amount become taxable by the federal and state governments and may be subject to a 10% (of earnings) penalty tax imposed by the IRS. Monies withdrawn up to the value of scholarships will not be subject to the 10% additional tax. Refunds will not include any Earnings Enhancements.