Saving for College in Michigan

WHAT’S NEW –New MET Marketing Campaign “Tomorrow’s Tuition... Set with MET” –2005 MET Enrollment - Sept. 1 to June 15 –Discounted Processing Fee for Online Enrollment –Contract Prices now through 12th Grade –Monthly Purchase Option - 15 year duration –Monthly Purchase Early Payment Discount

WHAT’S NEW –MET Statute now allows termination or transfer after 1/2 way point (will need Board approval) –MESP Match Funds Approved for –MESP Account Owner can be a Trust –Net Contributions now deductible –Recapture provision modified –FIA will disregard 529 savings for public assistance eligibility

MET Contract Options –Three Types of Contracts: Full Benefits Limited Benefits Community College MESP Investment Options –Three Investment Options: Managed Allocation 100% Equity Guaranteed

Similarities Benefits of Internal Revenue Code Section 529 State & Federal Tax Exemption on Qualified WD’s Purchase Contract/Open an Account for Any Child State Income Tax Deduction for Contributions Transfer Contracts/Accounts Among Siblings Gift Tax Exemption Payroll Deduction or ACH

Differences MET - Prepay Tuition & Mandatory Fees MESP - Save for all Qualified Higher Education Expenses MET - Pays Tuition & Mandatory Fees at MI Public Two or Four Year College (Refund amount Portable to attend MI private or Out-of-state college) MESP - Can Be Used to Pay for Total Qualified Expenses at Any College in Country

Differences (cont.) MET - Prepay with Monthly Installments, Payroll Deduction, ACH or Lump Sum - Ignore Rising Tuition MESP - Save as Much as $235,000. Deposit as Little as $25 ($15 if payroll deduction)

Differences (cont.) MET - Purchase for MI Child Newborn to 12th Grade, Allowed 9 Years to Use Contract MESP - Open Account for Anyone; No Age Limit, No Residency Requirement MET - Recognized as Student “Resource” for Financial Aid MESP - Recognized as Parental Asset for Financial Aid