Types of Section 529 College Savings Plans

There are two types of 529 college savings plans: prepaid tuition plans and savings plans:

Prepaid Tuition Plans allow for the pre-purchase of tuition based on today's rates and then paid out at the future cost when the beneficiary is in college. Performance is often based upon tuition inflation. Prepaid plans may be administered by states or higher education institutions. 

• The Michigan Education Trust (MET) is Michigan's 529 prepaid tuition plan.

Savings Plans are different in that your account earnings are based upon the market performance of the underlying investments, which typically consist of mutual funds. Savings plans may only be administered by states.

• The Michigan Education Savings Program (MESP) is Michigan's direct sold 529 savings plan.
• The MI 529 Advisor Plan is Michigan's advisor sold savings plan.

529 (A) Achieving a Better Life Experience - ABLE Plan

ABLE accounts allow eligible individuals the ability to save for qualified disability expenses and provide a saving/investment tool that are excluded from income and/or asset calculations for public assistance programs. MIABLE is Michigan's 529 (A) plan.

• Prepay tuition with three plan options
• Purchase credit hours at today's price for future use
• Three payment options
• Best benefit at Michigan public colleges and universities
• Funds can be used at MI private colleges, out-of-state school and trade schools
• Fifteen years from expected high school graduation to use, transfer or refund

Both Plans

• Both are Section 529 qualified tuition programs
• State income tax deductions
• Earnings are tax exempt for qualified withdrawals
• Low cost, no commissions
• Transferable to immediate family members
• Fund with after tax dollars
• Contribute with payroll direct deposit, ACH or one-time payments
• Can be used separately or together ($500,000 max)
• Minimal impact on financial aid
• Rollovers accepted from other 529 programs

• Investment-based 529 account with multiple investment options to choose from
• Use at any eligible educational institution
• Save for all qualified higher educational institution
• Open an account with as little as $25
• No age or time limit to use funds
• Two changes investment strategy every 12 months