Any participant may cancel a participation agreement at will. The board shall impose a penalty equal to or greater than ten percent of the earnings of an account for any distribution that is not:
(1) Used exclusively for qualified education expenses of the designated beneficiary;
(2) Made because of death or disability of the designated beneficiary;
(3) Made because of the receipt of scholarship by the designated beneficiary;
(4) A rollover distribution, as defined in Section 529(c)(3)(C)(i) of the Internal Revenue Code; or
(5) Held in the fund for the minimum length of time established by the board.