As far as states go, Michigan is something of a trendsetter in helping families save and/or pay for college. Not only does the state have a savings program that qualifies for a tax exemption under Section 529 of the Internal Revenue Code, but Michigan was the first in the nation to establish a pre-paid tuition plan.
Michigan offers several programs and scholarship opportunities, each of which can be used separately or together:
- Michigan Promise Scholarship (the successor to the Michigan Merit Award) is an often overlooked grant from the state. While not every student will qualify, those who do can earn up to $4,000 toward college.
- Michigan Education Savings Program (MESP) is one of two programs offered by Michigan. The more traditional of the two, the savings plan offers tax-deferred growth and tax-free educational disbursements. It is also much more flexible than the state's pre-paid tuition plan.
- Michigan Education Trust (MET) allows families to pre-pay tuition at a public Michigan college or university, thereby guarding against high inflation and/or economic downturn. While the MET program also has tax benefits, it is limited to tuition and mandatory fees.