Each decline in fees makes the MESP plan more affordable, which is a bit of good news for families facing rising education costs. In 2011-12, in-state tuition and fees at the nation’s public, four-year colleges increased at an average rate of 8.3 percent from the previous year – higher than the general inflation rate, according to a July 2012 analysis by the College Board Advocacy & Policy Center (“Trends in Tuition and Fees, Enrollment, and State Appropriations for Higher Education by State”; link to the report: http://advocacy.collegeboard.org/sites/default/files/12b_5761_TrendsByState_AnalysisBrief_WEB_120719.pdf).
In Michigan, tuition increases at public universities rose 6.9 percent in 2011-12 from the previous year, according to the College Board analysis.
MESP is among the nation’s top eight performers for all direct-sold 529 plans in one-, three- and five-year investment performance as of June 30, 2012, according to Savingforcollege.com’s latest 529 Composite Performance Rankings of 54 direct-sold 529 plans nationwide. The Savingforcollege.com rankings are 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. The plan composite ranking is determined by the average of its percentile ranking in the seven categories.
In addition, Morningstar, Inc., in its 2012 529 plan ratings also ranks MESP among the nation’s top eight plans and deems it among those most likely to outperform other plans on a risk-adjusted basis over a full market cycle. The ratings released Oct. 15, 2012, analyzed 64 of the nation’s 529 plans. Plans could earn Gold, Silver or Bronze Morningstar Analyst ratings, which are forward-looking, qualitative ratings. Four plans earned Gold ratings, and MESP was one of four awarded a Silver rating. A Gold rating signals that Morningstar has the highest conviction in the plan’s ability to serve college savers over the long term. Those earning Silver ratings exhibited many industry best practices, though Morningstar stated that it has less conviction in their future success.
Morningstar used five factors to arrive at the final rating, which reflects the quality of the entire plan, not a single investment: people, process, parent, performance and price.
TIAA-CREF Tuition Financing, Inc., notes that past performance is no guarantee of future results.
“MESP continues to strive to be a low-cost, flexible 529 college savings plan so more of investors’ funds can go toward student college savings goals and less to administrative fees,” said Michael Noone, president of TIAA-CREF Tuition Financing, Inc. “TIAA-CREF Tuition Financing, Inc., is committed to working with the Michigan Department of Treasury to help families and students reach their education vision as MESP account owners.”
MESP is administered by the Michigan Department of Treasury, which chose TIAA-CREF Tuition Financing, Inc., to manage the plan in November 2000. Since then, MESP has helped more than 105,000 families invest more than $3 billion toward college. TIAA-CREF Tuition Financing, Inc., is one of the nation’s largest 529 program managers and currently manages 11 state programs, including Michigan’s.
MESP is one of three Michigan Section 529 plans, all of which offer Michigan taxpayers a state income tax deduction on contributions and potential tax-free growth on any earnings if account proceeds are used to pay for qualified expenses. MESP can be used at any eligible college, university or trade school in the nation for a variety of qualified expenses, including tuition, mandatory equipment, fees, certain room and board costs and books. Limitations apply. See the MESP Disclosure Booklet for details.
To learn more about MESP, visit Misaves.com or contact us at 877-861-6377.
Consider the investment objectives, risks, charges and expenses before investing in the Michigan Education Savings Program. Please visit www.misaves.com for a Disclosure Booklet containing this and other information. Read it carefully. Investments in the plan are neither insured nor guaranteed and there is the risk of investment loss.
Before investing in a 529 plan, you should consider whether the state you or your designated beneficiary reside in or have taxable income in has a 529 plan that offers favorable state income tax or other benefits that are only available if you invest in that state’s 529 plan.
The tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor. Non-qualified withdrawals are subject to federal and state taxes and the additional 10% federal penalty tax.
TIAA-CREF Tuition Financing, Inc., MESP Program Manager
Source: Press Release
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