Spring and college have a lot in common. They’re exciting, transitional times and full of promise. And, sure as April showers come down, those college tuition rates go up – potentially more than double in the next decade. Luckily, April is also a prime time to lock in today’s college tuition rates with a contract from Michigan Education Trust, aka MET – and even get some tax benefits. Here are five great reasons:
1. There are multiple contract options.
MET lets you buy in-state college credits at today’s rates in these three convenient ways:
- Pay-as-you-go plan
Buy one credit hour* for any age:
Full benefits: $583
Limited benefits: $470
Community college: $109
*After one credit hour, add $25 minimum any time
- Lump sum plan
Buy one semester (15 credits) for any age:
Full benefits: $8,735
Limited benefits: $7,037
Community college: $1,628
- Monthly plans
Commit to buy one semester of college over four, seven, 10 or 15 years. The younger your child is when you start, the lower your cost!
Full benefits: $79-$209
Limited benefits: $63-$167
Community college: $14-40
2. Earnings are tax deferred.
When the time comes to spend those MET savings, earnings are exempt from state and federal income tax when used for qualified higher education expenses. Typically MET covers: In-state tuition at virtually any Michigan public college or university, including 28 public community colleges (or a refund amount to out-of-state colleges) and mandatory fees at Michigan public colleges. It does not include application fees, contact hour fees and course fees (lab fees for science/computer classes, etc.). Total contract price (lump sum) or monthly payments made are deductible on a purchaser’s Michigan income tax form in the year they are made.
3. You can roll other funds into it.
Have other funds you’d like to scoot into your MET account? No problem. You can roll these savings into your account:
- Money from other 529 programs (including Michigan Education Savings Program)
- Coverdell Education Savings Account funds
- Qualified U.S. Savings Bonds
4. It’s flexible, transferable and portable.
Things change. And a MET contract plan has you covered from every angle, right down to refunds* that make it impossible to lose your investment.
Need more time? Students have 15 years from their expected high school graduation to use tuition benefits.
Going out of state? Get a refund toward any out-of-state baccalaureate degree-granting institution or community college.
Get a full ride? Here again, get a refund.
College not in the cards? Transfer funds to immediate family members of the beneficiary (siblings, children, first cousins) – or get that refund.
* Refunds possible once the original beneficiary turns 18 years old or graduates from high school.
5. You’ll enjoy plenty of benefits.
MET offers plenty of ways to save. Here are some of the choices you have:
- Choose from pay-as-you-go, lump sum or monthly contracts (see #1 for a closer look)
- Buy by credit hour, semester or even year
- Pay electronically or with check or money order
- Some employers offer convenient payroll deductions
- Parents, grandparents, businesses and others can easily chip in
MET is a state-sponsored college savings plan that lets parents, grandparents, businesses and others to pre-pay undergrad tuition for Michigan students. It’s a “529” plan, which simply refers to a federal IRS code that means it’s exempt from state and federal taxes. These funds can be used at any Michigan public university, community college or thousands of colleges across the nation.
Remember: April 30 is the last day open a MET contract at the 2016 rates. On May 1, rates will increase. Get more information and get started at SETwithMET.com.