Halloween is just around the corner, but there is something that terrifies parents all year round - the cost of college. Saving enough money can be a scary thought, so we spoke to Diane Brewer with Michigan Education Trust (MET) to help make sure you don’t get tricked.
The MET is the first prepaid education savings program in the nation. How it works is parents, family, guardians or even friends are purchasing credit hours at today’s price, so you are locked in for the number of credit hours you purchase. Here are some commonly believed myths about the program, and the truth behind them.
Myth #1: It’s too late to start saving.
This is false, the sooner you start saving the better, but it is never too late. If your kid is in elementary, middle, or even high school, it’s still a good time to start saving.
Myth #2: You need a lot of money to open up an account.
There are a lot of different options when it comes to the MET. You can do a lump sum option, but there are other programs that do monthly payments, or pay as you go where you can do payments as low as $25 after purchasing your first credit hour.
Myth #3: If my child doesn’t go to college, my money disappears.
This one is definitely not true. These programs are refundable if your child doesn’t go to college, or if they are going to a specialized program.
Myth #4: There aren’t any tax benefits.
False. You get a Schedule 1 deduction on your Michigan Income Tax for your contributions. On the federal level, your earnings are growing tax-free when they are used for higher education.
Myth #5: My child has to attend a school in Michigan.
This is a big myth. You do get the biggest bang for you buck if your child attends a Michigan public university or community college because they are covered by the credit hour. They do, however, have conversions so you can pay a Michigan private institution, or you can go out of state an pay a degree-granting institution. Your money is not lost if your child decides not to attend a Michigan school.
To learn more about Michigan Education Trust, click or tap here, or you can call 1-800-638-4543, or email at TreasMET@Michigan.gov.