Enthusiasm for the new Michigan Education Savings Program (MESP) is running high with over 16,000 applications downloaded from the program Web site (http://www.misaves.com/) and nearly 4,000 phone calls to the toll-free number (1 877 861-MESP) since the November 21 introduction.

"We designed a flexible, tax-advantaged program to appeal to all income levels, and MESP clearly has struck a responsive chord across the state," said Lt. Governor Dick Posthumus. "The December 31 deadline for a state income tax deduction and the gift-giving season are probably spurring additional interest."

The MESP Program allows parents, grandparents, relatives or friends to contribute as little as $25 to create an account to save for a child’s higher education, or $15 through payroll deduction. There is a choice of three investment options. Earnings grow federally tax-deferred, with income taxes eventually paid at the beneficiary’s (eventual student’s) income-tax rate, which presumably will be lower than that of the account owner. There are no state income taxes on earnings used to pay for qualified higher education expenses, and account owners can receive an annual state income tax deduction of up to $5,000, or $10,000 for joint filers. To receive a tax deduction, contributions must be postmarked by December 31 each year.

There also is a State matching contribution of one dollar for every three dollars contributed by a first-time account owner, up to a maximum State contribution of $200, with a family income eligibility ceiling of $80,000 and a beneficiary age limit of six.

"The holiday season is a wonderful time to give a gift of lasting value – a start on saving for higher education," said Sen. Mike Rogers who sponsored the legislation. "I cannot think of anything that is more important for the future of our young people and their families or for the future of our State’s economy."

MESP is offered by the Michigan Department of Treasury. Funds placed in MESP are managed by TIAA-CREF Tuition Financing, Inc. (TFI), a wholly owned subsidiary of TIAA, part of the leading pension system in the U.S. for colleges and universities. TFI has been selected as program manager for 11 state-sponsored, higher education savings plans, making it the largest manager of these programs. For information, including applications and a full Disclosure Booklet, call toll-free: 1-877-861-MESP, or visit the MESP Web site: http://www.misaves.com/.