Gifts can turn into future tuition funds

MET waives enrollment fee for December to encourage saving for children’s college education.
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While gifts are starting to get stacked under Christmas trees, ready to be opened on Dec. 25, there is one program that is providing families and friends an opportunity to give their children the gift of investment, a gift that may not be opened for more than a decade from now.

The Michigan Education Trust (MET), the nation’s first 529 prepaid tuition plan, allows for families and friends to begin investing money into Michigan young children’s post-secondary education, long before they plan which college they’d like to attend.

“Toys and video games are fleeting but for as little as $125, you could buy your child one hour of college credit and start building a college savings plan for their future,” said Diane Brewer, executive director of MET, the 529 prepaid tuition program administered by the Michigan Department of Treasury. “You don’t have to be the parent of a child to start saving for their college education. Aunts, uncles, grandparents and friends of the family are all welcome to open or contribute to a MET plan.”

MET allows for families and friends to purchase college credit hours to cover tuition either for Michigan community college or a Michigan public four-year college with a Pay-As-You-Go account.

Prices of MET’s Pay-As-You-Go contracts range from $125 per credit hour for a community college contract, $612 for one credit hour to cover tuition and mandatory fees at any Michigan public university or $508 for a credit hour under a limited-benefits contract, which covers up to 105% of the weighted average tuition of Michigan’s public four-year universities.

MET also sells contracts both through lump-sum and monthly purchase plans that require minimum purchases of a semester’s worth of tuition. Families and friends can purchase up to five years of college credit hours.

As an incentive to encourage families and friends to start to invest in their children this holiday season, MET is offering a $100 matching grant on contracts purchased for new beneficiaries during this month. The program also will waive its $25 enrollment fee in December.

Only one account per beneficiary qualifies for the match and fee waiver, and MET will make the match after account holders complete their purchase of at least one credit hour of prepaid tuition.

“By saving a little each month early on, family members can all pitch in and prepare financially for the growing expense of college,” Brewer said.

Since MET began in 1988, Brewer said they have sold over 124,000 contracts, which includes over 121,000 beneficiaries because some students have had more than one contract in their name. 

According to Brewer, during the last enrollment period, which ended in September, 54% of total purchases were done as a lump sum.

While the pandemic did not dramatically impact contributions compared to the previous year, Brewer said their contributions were down between 4% and 5%.

“People have to take care of themselves but from what it looks like, people are still trying to keep this a priority,” she said.

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