The benefits of a MESP university savings account for children

College expenses cause stress. It’s a simple truth for parents, whether your child is newborn or about to graduate. Another truth? Opening an education savings account for your child is a smart way to keep these future costs under control, no matter where you are in your parenting journey.

The Michigan Education Savings Program, or MESP, is designed to help you do just that.

This Michigan 529 University Savings Plan offers both flexibility and stability in the face of these tumultuous costs, including tuition, room and board, books and more.

“The cost of college education is a major concern for most families with good reason,” notes the MESP on its website. “It is increasing at a faster rate than inflation. The unforeseen financial challenges brought on by a global pandemic did not help matters.

But the good news is that MESP can provide a solid foundation. The sooner you start, the more money you will have to help pay for your child’s college dreams.

Here’s a closer look at this plan, how it works, and how you can start one for your child today.

What is a 529 plan?

In short, a 529 plan is a tax-advantaged savings plan designed to help save for qualifying graduate costs. The “529” refers to Section 529 of the Internal Revenue Code.

The MESP is similar to a 401 (k) or Roth IRA in that you take after-tax contributions and invest for your loved one’s future. MESP offers 18 different investment options to suit everyone’s investment strategy. These grow, tax-deferred, over time (note that funds fluctuate with the economy).

When you finally withdraw the funds for higher education expenses, you are not taxed. Your MESP funds can be used for schools in the state or out of state. And, more specifically, you can use them to cover tuition, room and board, and additional college fees.

Keep in mind that you cannot deduct your contributions from federal income tax.

How much to contribute

“It only takes $ 25 to open an account and that’s the minimum amount you can contribute. You can contribute as often or as infrequently as you like, weekly, monthly, once a year at bonus time, ”says Jennifer Burke, Senior Director of Marketing for MESP. “The commitment to save can fit any budget. “

Anyone can participate – family members, friends, both in-state and out-of-state – and for any occasion, whether it’s a birthday, a birthday party, or a birthday party. diploma, vacation or just because.

There is also no limit to the amount you can invest each year, but the maximum balance per account is $ 500,000.

You can also set up direct payroll deposit through your employer with a minimum of $ 15 per pay period. It’s a smart way to set recurring contributions as a fixed expense, so you don’t even have to think about it.

Opening an account

Getting started is in a few simple steps – just 15 minutes on average. Start by visiting the “Open a 529 Account Now” page on You can also print your registration forms from the site, fill them out and mail them.

Be sure to read the Enrollment Kit book for a quick overview of how MESP works.

To set up your account, prepare a few things to speed up form filling. According to the MESP, these are the following:

  • Information about you (address, date of birth, social security number)
  • Information about your beneficiary (date of birth, social security number)
  • Bank information (account number, routing number)

Note that the first The social security number that you will enter on the form is that of the account holder (parents, grandparents, etc.) and the second is the beneficiary (your child, niece, etc.).

There are no subscription, start-up or maintenance fees to open your MESP account.

Flexibility is the key

Funds in your MESP account can ultimately be used for any eligible institution in the United States, as well as overseas. This includes public and private colleges and universities, trade schools, graduate schools and vocational schools, notes the MESP.

What if your child decides not to go to college or if some of the funds are not used? You can optionally transfer them to the plan of another eligible family member. Keep in mind that ineligible withdrawals are subject to federal and state taxes, as well as a potential 10% federal income penalty.

And, while starting earlier is ideal, investing later in the game is far from the deciding factor.

“Even if you start saving when your child is in middle or high school, putting money aside can help reduce their need to borrow,” notes MESP.

To learn more about MESP, visit or call 877-861-MESP from 8 a.m. to 8 p.m. Monday through Friday.

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