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Michigan Education Trust
The Michigan Education Trust prepaid tuition program offers several options to the Michigan family to lock in tuition at Michigan public institutions. What makes this program different than most is that contributions are irrevocable.
Savingforcollege.com's 5-Cap Ratings provides an evaluation and comparison of 529 plans, utilizing a formula that examines dozens of factors grouped into the following categories. (Scale 0 to 5; 5 is highest)
Did you know?
Residents are not limited to investing in their own state's plan. Another state may offer a plan that performs better and has lower fees. If there is no tax break offered for in-state investors ... shop around!
Also, the plan chosen does not affect which state the student enrolls in. An investor can live in NY, invest in a plan from NV and send a student to college in FL.
Enroll directly with the program.
MET Board of Directors and Department of Treasury
The Enrollment Period to purchase MET contracts is December 10, 2015 - September 30, 2016.
The beneficiary must be a Michigan resident at the time of program enrollment.
U.S. residents at least 18 years old, UGMA/UTMA custodians, and legal entities. A MET contract cannot be purchased by residents of Arizona, Illinois, New York, North Dakota, Ohio, or Vermont.
Contract benefits must be used within 15 years after the projected college entrance date.
MET contracts offer three purchase options: Lump Sum, Pay-As-You-Go, and Monthly.
The Pay-As-You-Go option allows purchases of credit hours. From December 10, 2015 to April 30, 2016, prices range from $106 per credit hour for a community college contract to $571 per credit hour for a full benefits contract. From May 1, 2016 to September 30, 2016 prices range from $109 to $583.
Monthly purchases are available in four, seven, ten, and fifteen year increments, depending on the age of the beneficiary. From December 10, 2015 to April 30, 2016 payments range from $14 for community college benefits (newborn to age 3) to $1,640 for full benefits (newborn to 8th grade). From May 1, 2016 through September 30, 2016, prices range from $14 to $1,672.
For the period of December 10, 2015 through April 30, 2016, lump sum prices range from as little as $1,596 for a one-semester community college contract to as much as $68,512 for a four-year full benefits contract. From May 1, 2016 to September 30, 2016 prices range from $1,628 to $69,880.
The Full Benefits contract pays for one to ten semesters of tuition and mandatory fees at any Michigan public institution; the Limited Benefits contract pays for one to ten semesters of tuition and mandatory fees at Michigan public institutions up to 105% of the weighted average tuition of all Michigan four-year universities; and the Community College contract pays one to four semesters of in-district tuition and mandatory fees at any Michigan public community college.
Weighted average public tuition if used at in-state private colleges and the average public tuition if used out-of-state.
Lump sum, or monthly over 4 years, 7 years, 10 years, or 15 years. Date when payments begin under a monthly purchase contract depends on when the contract is submitted. Pay-As-You-Go option requires a minimum initial purchase of one-credit hour, but subsequent purchases can be made at any time in minimum increments of $25. Pay-As-You-Go contracts must be completed 45 days before use.
Fees & Expenses
On-line enrollment: $25
Enrollment by mail: $60
Taxes and other Benefits
Program match on contributions:
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Contributions to the Michigan Education Trust are fully deductible from Michigan taxable income. Rollover contributions are not eligible for the deduction, according to the Michigan Department of Treasury.
The principal portion of nonqualified withdrawals from this plan are included in Michigan taxable income to the extent of prior Michigan tax deductions. Qualified rollovers are not subject to recapture.
Qualified distributions from Michigan and non-Michigan 529 plans are exempt. Also excluded are distributions made due to the beneficiary's death, disability, scholarship, or attendence at one of the U.S. military academies.
Michigan follows federal tax-free treatment.
Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?
Statutory protection of an account from creditors:
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Distributions & Terminations
To the higher education institution if beneficiary is attending college; to the refund designee name in the MET contract if beneficiary is not attending college
The contract purchaser cannot transfer rights in the contract during lifetime.