Michigan Education Savings Program ranked among best college savings plans
Published 11:01 am Tuesday, March 22, 2016
LANSING — The Michigan Education Savings Program (MESP) produced the seventh-best investment performance among state-sponsored direct-sold 529 college savings plans nationwide in 2015, according to SavingForCollege.com.
SavingForCollege.com, an independent company that aims to promote understanding of the challenge of paying for higher education costs, also ranked MESP as the eighth-best performer over the past five years in its annual review of 529 savings plans.
“We’re proud of this third-party recognition of MESP’s investment achievements, but we’re most pleased that the plan’s performance has benefited thousands of families who entrust MESP to help them save for college,” said Robin Lott, MESP administrator for the Michigan Department of Treasury.
More than 50 plans were analyzed in SavingForCollege.com’s 2015 rankings, which were derived using the plans’ relevant portfolio performance in seven unique asset allocation categories: 100 percent equity, 80 percent equity, 60 percent equity, 40 percent equity, 20 percent equity, 100 percent fixed and 100 percent short term.
Each plan’s composite ranking is determined by the average of its percentile ranking in the seven categories, SavingForCollege.com says.
Direct-sold 529 plans — named after Section 529 of the Internal Revenue Code, which created these types of savings plans — are those that investors can enroll in without using a broker.
MESP is one of three Michigan Section 529 plans. The others are Michigan Education Trust (MET), a prepaid tuition plan that allows for the purchase of tuition based on today’s rates, and MI 529 Advisor (MAP), a savings plan offered through financial advisers that includes various investment options.
Each plan provides Michigan taxpayers a state income tax deduction on contributions and potential tax-free growth on earnings if account proceeds are used to pay for qualified higher education expenses.
MESP can be used at any eligible college, university or trade school in the nation and some abroad for a variety of qualified higher education expenses, including tuition, fees, certain room and board costs, books, computers, supplies and equipment required for enrollment.
The plan, which since its inception in 2000 has been managed by TIAA-CREF Tuition Financing Inc., today has more than 225,000 accounts with total assets exceeding $4 billion.