It’s Never Too Late to Start Saving for College

When should you start saving for college? While it's true that earlier is ideal, it's not always reality. Learn how to gain ground with an MET or MESP account.

With the rising costs of higher education, opening a college savings account is a must for families – and the earlier you start saving for college, the better.

But if your child is already in high school, there’s still time to save. In fact, even a couple years of savings helps ease financial stress for families.

After all, with tuition, room and board, books and supplies, costs quickly add up when it’s time for your teen to head off to college. In fact, according to the College Board, the cost of in-state public college tuition for the 2017-18 year was roughly $25,000 – and for an in-state private college, that price was double.

With so many other financial burdens placed on families, it’s difficult to come up with tens of thousands of dollars to send kids to the university of their dreams.

And while the majority of parents understand the importance of saving for their child’s college costs, according to a survey conducted by the Michigan Education Trust, only about half are actually doing it.

Whether your child is 6 months old or just turned 16, read on for details on how to save for your student’s college education.

What’s a 529 plan?

One of the primary ways families can save for college is to invest in one of Michigan’s two college saving plans: the Michigan Education Savings Program (MESP) and the Michigan Education Trust (MET).

Both are 529 savings plans. The “529” stands for the federal code that designates contributions to these plans tax-exempt. Both plans can also be transferred to out-of-state schools.

And while both plans are 529 plans, there are some distinctions between these two ways to start saving for college.

About MESP

MESP is similar to a 401(k), meaning funds will fluctuate with the economy. It can be started with as little as $25. There’s no limit to how much money can be invested annually, but the maximum balance per account is $235,000.

The funds cover tuition, room and board, and any additional college costs at any accredited public or private university, community college or vocational school in the United States – and even abroad.

Any unused funds from your child’s MESP account can be used toward an eligible family member’s college savings plan.

About MET

When it comes to MET, the money is used solely for tuition – and there are three plans to choose from: full, limited and community college (more on that in a minute).

MET allows families to pre-purchase tuition at today’s rates, which will then be paid out as the future cost of the child’s college education.

A MET contract will help ensure that your child will be able to attend and afford their college of choice, even if it is out of state.

If your child lands a scholarship that covers the cost of their education, or if they choose not to attend college, the MET contract can be terminated and refunded.

Opening a MET account

There are three plan options to choose from for those considering a MET account.

1. Full benefits plan

Under this plan, in-state tuition and mandatory fees at any Michigan public university, or tuition and mandatory fees at in-district or out-of-district Michigan community colleges, is covered.

Purchase up to five years, or 150 credit hours.

2. Limited benefits plan

If your student’s college choice does not exceed 105 percent of the average weighted tuition of all Michigan public four-year universities, tuition is covered.

However, if the tuition at your child’s chosen university is higher than the average, the number of credits will be prorated based on the number of credit hours MET can purchase with 105 percent of the average cost of a Michigan four-year public university.

You can purchase up to five years, or 150 credit hours, under this plan.

3. Community college plan

The plan provides in-district tuition and mandatory fees at Michigan public community colleges. Some community colleges in the state are not in-district, so students are responsible to pay the difference in costs.

You can purchase up to four semesters, or two years, under this plan.

Contributing to a MET account

Start saving for college by purchasing in-state college credits at today’s rates in three different ways:

Pay-as-you-go plan

Buy at least one credit hour for any age. After that, add $25 minimum at any time.

Lump sum plan

Buy semester(s) (15 credits/semester) for any age.

Monthly plans

Commit to buy one semester of college over four, seven, 10 or 15 years.

Visit to enroll online or request a free enrollment kit by filling out a form to receive more information sent to your home. You can then fill out the form and mail it back to MET.

The prepaid tuition amount (for lump sum contracts) or the first payment, plus a non-refundable $60 processing fee, is required with each contract. Payments must be made by check or money order.

Opening an MESP account

Visit the open an account page on – or print your enrollment forms from the site, fill them out, and mail them back to MESP.

You can request an enrollment kit online, or call to have the materials sent to you. Call 877-861-MESP from 8 a.m. to 8 p.m. Monday-Friday.

To set up an account, you’ll want to have a few things prepared to make filling out the forms quicker. Here’s what MESP recommends:

  • A blank check and/or deposit slip
  • Your bank branch’s phone number
  • Your Social Security Number or Taxpayer Identification Number
  • The name and Social Security Number or Taxpayer Identification Number of the beneficiary

The first Social Security Number you’ll enter on the form is for the account owner (parents, grandparents, etc.), and the second is the beneficiary (your child, niece, etc.).

The bottom line

Whether you choose MET, MESP or both, encourage family and friends to donate to your child’s college savings fund, too, to start saving for college.

For birthdays and holidays, suggest to family members to opt for one present and a contribution to your kid’s educational future.


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