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Gov. Whitmer Urges Parents to Save Today for their Children’s Future Education
September 01, 2022
LANSING, Mich. – In recognition of September as Michigan’s College Savings Month and with nearly 1.4 million federal student loan borrowers statewide holding $51.3 billion in debt, Governor Gretchen Whitmer today stressed the importance of parents using a 529 plan to save for their child’s post-secondary education.
“Saving today for your child’s education tomorrow has long-term benefits and can put them on a path to long-term success,” said Governor Whitmer. “I am focused on ensuring every Michigander can pursue opportunities after high school and land a good-paying job—whether that means going to trade school or attending a two- or four-year college. Students and families often have to take out student loans to pay tuition, which can take decades to pay off. Families who begin to save for college early, when their children are young, are often in a stronger position financially when the tuition bills come later in life. I encourage families to check out some the options provided by the Michigan Department of Treasury.”
A 529 plan is an education savings plan designed to help families set aside money for future education expenses. Contributions provide state income tax deductions and earnings in a plan grow tax free and are exempt at the federal and state level when used for higher education.
These plans get their name from Section 529 of the federal Internal Revenue Code.
The state of Michigan offers three Section 529 college saving plans: Michigan Education Trust (MET), Michigan Education Savings Program (MESP) and MI 529 Advisor Plan (MAP). These plans can be broken up into two categories:
- Prepaid Tuition Plan (MET) allows 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.
- Investment-Based Savings Plans (MESP and MAP) are different in that your account earnings are based upon the market performance of the underlying investments, which typically consist of mutual funds. Investment-based savings plans may only be administered by states.
“Our MET and MESP staff members can guide you through the process of opening an account,” said State Treasurer Rachael Eubanks. “Please contact us so we can help you figure out which plan best suits you and your family’s needs. Saving for college does not require a huge deposit. Every little bit helps.”
For more information about 529 plans, go to SavewithMI529.com. For more information about saving for college, contact MET at TreasMET@michigan.gov, 1-800-MET-4-KID or on Facebook, Twitter or Instagram.
Governor Whitmer’s Bipartisan Investments in Tuition-Free Higher Education
Since taking office, Governor Whitmer has worked across the aisle to make college more affordable by expanding tuition-free higher education and skills training for Michiganders over 25, future educators, and talented young students pursuing a degree at public Michigan universities.
She established and funded the bipartisan Michigan Reconnect program, which has put over 100,000 people on the path to tuition-free higher education or skills training. With the recent, bipartisan budget Governor Whitmer signed, Michigan funded $10,000 scholarships for 2,500 future Michigan educators every year and offered school districts funds for Grow Your Own Programs, helping districts train staff for teaching positions, tuition-free. She also expanded scholarships for young Michiganders pursuing higher education at one of the state’s public universities.
Ron Leix, Treasury, 517-335-2167