GRAND RAPIDS, Mich. (WOOD) – As parents, we know the thought of saving for future college costs can be daunting, but it doesn’t have to be scary if you let Michigan Education Trust help you! Today, we have Diane in studio to discuss some popular myths about saving for college.
Myth No. 1: It’s too late to start saving.
It’s never too late. While it is true that the earlier you start saving for your child’s college tuition, the better, there is still time to save even if your child is in grade school, middle school, or high school.
Myth No. 2: You need a lot of money to open an account.
MET’s Pay-As-You-Go plan allows parents, grandparents and friends to buy one college credit hour in increments as low as $25 after purchasing the first full credit hour. With the monthly option, you can spread payments over four-, seven-, 10-, or 15-year increments depending on your child’s age. Then, your family can bake the expense into your monthly budget.
Myth No. 3: If my child doesn’t attend college, then my investment disappears.
If your child opts to take another path, don’t fret. When your child turns 18 years old, they have the option to either pass their MET to a relative or terminate the contract for a refund.
Myth No. 4: There aren’t any tax benefits.
No matter which payment option you choose, each is deductible on the purchaser’s Michigan income tax form in the year it’s made. Plus, both purchasers and students may be exempt from state or federal income tax on the earnings of their MET plan when the benefits are used for qualified higher education expenses.
Myth No. 5: My child has to attend school in Michigan.
Don’t let the name fool you. Your child can benefit from MET even if they attend a Michigan public college or university. A MET refund can be directed to Michigan’s independent and out-of-state higher education institutions.
More than 96% of high school graduates participating in MET have attended a college or university or received a refund of MET payments for a trade school or a certificate program. For 35 years, MET has provided families peace of mind as they work, plan and save to help provide their children with a debt-free start to pursue their dreams. There’s no better time than now for contributing to a MET plan, and you don’t have to be a parent to contribute to a 529 prepaid education savings program.
Sponsored by Michigan Education Trust.