Treasury highlights the importance of higher education during College Savings Month

LANSING – The Michigan Department of Treasury is reminding families that September is College Savings Month, a time to highlight the importance of saving for college and the impact it can have on a child’s life.

To further raise awareness, and to make it easier for families to save, Treasury is lowering, by 60 percent, the administrative fee it assesses on Michigan Education Savings Program (MESP) investment options.

“Studies have shown that young people with education-related savings are nearly four times more likely to attend a four-year college than those with no college savings,” said Robin Lott, director of the Michigan Education Trust and administrator for MESP and MI 529 Advisor Program (MAP). “By reducing MESP administrative expenses we want to encourage people to save for college by allowing more money to stay in an individual’s account.”

Lott also noted that the Michigan Education Trust (MET) is waiving its $25 enrollment fee for the remainder of the MET enrollment period, which ends September 30.

Research by the Center for Social Development has found that having savings may raise a young person’s educational expectations in addition to their academic effort and achievement.

The Department of Treasury offers three ways for families to save for college:

· MESP, which is sold directly to investors, is a savings plan that offers account owners nine investment options.

· MET, a prepaid tuition plan that allows for the purchase of tuition based on today’s rates.

· MI 529 Advisor (MAP), a savings plan offered through financial advisers that offers various investment options.

All three plans are classified as 529 plans, named after the section of the Internal Revenue Code that established them. Each of Michigan’s plans offers tax incentives, including state tax deductions on contributions.