The cost of higher education is only going up, but that shouldn’t get you down. Saving for college doesn’t need to be a burden. With the Michigan Education Savings Program (MESP), there’s no big upfront investment and getting started takes about as long as grabbing a cup of coffee.
With MESP you can easily open an account in just 15 minutes and easily manage it online or by mail. By setting up automatic contributions from your bank account or by payroll deduction (if supported by your employer), making regular contributions is hassle free.
Your earnings, if any, are free from federal income tax when used for qualified expenses. In the meantime, your contributions are reinvested automatically so your account can grow more than a taxable account over the same period.
Funds can be used at any accredited university, college or vocational school nationwide — and many abroad. Basically any institution with a student aid program qualifies.
MESP can be used to pay for tuition, certain room and board costs, computers and related technology expenses as well as fees, books, supplies, and other equipment.
Many parents worry that a 529 Savings Account can adversely affect eligibility for financial aid. So long as the parent is the account owner, funds are typically treated as belonging to the parent, not the child, minimizing the impact on financial aid.*
Open an account with as little as $25 per investment option, or $15 dollars per pay period using automatic payroll deduction. Since there are no application, sales, or maintenance fees, it’s affordable even for those on a modest budget.
You don’t have to do it all on your own! Grandparents as well as other family and friends can make gifts to your account for maximum growth potential.
If it turns out your child or grandchild doesn’t need all the money or their education goals change, you can designate a new beneficiary penalty-free so long as they’re an eligible member of your family.
MESP provides a variety of professionally managed investment options to choose from including age-based options that automatically change as the beneficiary grows up. Alternatively you can tailor your portfolio with multi-fund, single-fund and guaranteed options to match your risk tolerance, timeline, and investment preferences.
When you or anyone else makes a contribution, it may qualify for an annual gift tax exclusion of $14,000 per year for single filers and $28,000 a year for couples. As a 529 Plan, MESP is the only investment that allows you to give up to 5 years’ worth of gifts at one time — for a maximum of $70,000 for a single filer and $140,000 for couples.