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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

The Enrollment Period to purchase MET contracts is December 1, 2021 - September 30, 2022.

Inception

1988

State agency

MET Board of Directors and Department of Treasury

Tax deduction

For single filers: $5,000/yr per beneficiary

For joint filers: $10,000/yr per beneficiary

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?

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.

Significant time or age restrictions imposed by the program:

Contract benefits must be used within 15 years after the projected college entrance date.

Contributions

Minimum contributions:

In the December 2020 - September 2021 enrollment, $1,875 for a one-semester Community College contract purchased in a lump sum for a newborn. Installment plan payments available for as low as $16 per month.

Contractual Features

Contract prices:

2021-22 Enrollment:
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 1, 2021 to September 30, 2022, prices range from $120 per credit hour for a community college contract to $750 per credit hour for a full benefits contract.

Monthly purchases are available in four, seven, ten, and fifteen year increments, depending on the age of the beneficiary. From December 1, 2021 to September 30, 2022 payments range from $15 for community college benefits (newborn to age 2) to $1,640 for full benefits (newborn to 8th grade).

For the period of December 1, 2021 through September 30, 2022, lump sum prices range from as little as $1,800 for a one-semester community college contract to as much as $90,000 for a four-year full benefits contract.

Available tuition packages:

The Full Benefits contract pays for one to eight semesters of tuition and mandatory fees at any Michigan public institution; the Limited Benefits contract pays for one to eight 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.

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.

Contract payment options:

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.

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:

On-line enrollment: $25
Enrollment by mail: $60

Taxes and other Benefits

Tax deduction for single filers:

$5,000/yr per beneficiary

Tax deduction for joint filers:

$10,000/yr per beneficiary

Program match on contributions:

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.

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.

Your tax savings per year

Tax Filing Status

Household income

$100,000

Monthly Contribution

$100

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

State tax treatment of rollovers:

Michigan follows federal tax-free treatment.

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:

http://www.michigan.gov/setwithmet

Telephone:

1-800-638-4543

Twitter

https://twitter.com/SETwithMET

Social Media

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