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Michigan Education Trust

Prepaid Plan

Prepaid Plans let you pre-pay all or part of the costs of a college education. They may also be converted for use at private and out-of-state colleges. Because of the unique structure of these plans, they are not considered in our ratings methodology.

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.

OVERVIEW

Program type

Prepaid contract

Enrollment period

MET offers year-round enrollment.

Inception

1988

State agency

MET Board of Directors and Department of Treasury

Tax deduction

For single filers: $5,000/yr

For joint filers: $10,000/yr

MORE INFORMATION

Eligibility

State residency requirements:

The beneficiary must be a Michigan resident at the time of program enrollment.

Who can be a participant/owner in the program?

The Purchaser must reside in the United States. Non-Michigan residents should check their state's laws regarding their eligibility to purchase MET.

Significant time or age restrictions imposed by the program:

Contract benefits must be used within 15 years after the projected high school graduation date.

Contributions

Minimum contributions:

$25

Contractual Features

Contract prices:

MET offers three plan options, two university plans and one community college plan. Prices are based on the plan type chosen and the age of the beneficiary. Current contract prices can be found on MET's website.

Available tuition packages:

The Full Benefits contract pays tuition and mandatory fees at any Michigan public institution up to the number of credit hours purchased on the contract; the Limited Benefits contract pays tuition and mandatory fees at Michigan public institutions based on the number of credit hours purchased on the contract, if a student attends an institution that exceeds 105% of the weighted average tuition, a prorated number of credits will be paid to the school. The Community College contract pays in-district tuition and mandatory fees at any Michigan public community college up to the number of credit hours purchased on the contract.

Benefits for beneficiary attending private or out-of-state institution:

Weighted average public tuition if used at in-state private colleges and the average public tuition if used out-of-state (Full Benefits and Community College plans).

Contract payment options:

A minimum of $25 contributions can be made at anytime. Contributions must be completed 45 days before use.

Are program benefits backed by the full faith and credit of the state?

Are program benefits collateralized or guaranteed in any other way?

Fees & Expenses

Enrollment or application fee:

Taxes and other Benefits

State tax deduction or credit for contributions:

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 total amount of contributions may be eligible for a state tax deduction during the year the contributions are made.

Calculate your Michigan 529 tax benefit

Find out how much you can save on state taxes this year by contributing to a Michigan 529 plan.

Tax Filing Status

Household income

$100,000

Your monthly contribution

$100

Tax Savings per Year

State tax recapture provisions:

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.

State tax treatment of qualified distributions:

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 attendance at one of the U.S. military academies.

State tax treatment of rollovers:

Michigan follows federal tax-free treatment.

Program match on contributions:

Does the sponsoring state exclude the value of an account for state financial aid purposes?

Yes

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

Is there a rewards program or outside scholarship program that works with this program?

Yes, the Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.

Statutory protection of an account from creditors:

Distributions & Terminations

To whom are distributions made payable:

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

Account Changes

Policy regarding participant/owner changes:

The contract purchaser cannot transfer rights in the contract during lifetime.

Contact

Website:

https://www.michigan.gov/setwithmet

Telephone:

1-800-638-4543

Twitter

https://twitter.com/SETwithMET

Social Media

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While Saving For College strives to maintain accurate and up-to-date information using plan disclosure statements and other sources, readers should check the plan's official website and disclosure statement for the most current and complete details.

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