This story was updated on May 22 to include statistics provided for the Michigan Education Savings Program.
THURSDAY, May 22 — Battling a slow economy and declining enrollment numbers, the state is hosting an event to promote interest in their two college savings programs, the Michigan Education Trust and the Michigan Education Savings Program.
At 2 p.m. May 29, representatives of both programs will hold a community enrollment session at the Lansing Regional Chamber of Commerce, 500 E. Michigan Ave., for 529 Day. It is named for the Internal Revenue Service tax code that classifies similar college savings programs across the nation. Representatives will be available to explain the programs to the public and sign people up one-on-one.
The Michigan Education Trust provides contracts that anyone can purchase for a child. Purchasers can buy partial or full undergraduate tuition for a beneficiary at today’s price, as long as the plan is used within 15 years of purchase. The Michigan Education Savings Plan is a college investment account — similar to a 401K plan — that purchasers can start with a $25 minimum balance. Both programs are tax-deductible.
Robin Lott, executive director of the Michigan Education Trust, oversees both programs. She hopes that the 529 Day event will stir up much-needed community interest in the programs.
“I’m really hopeful we’ll see a good turnout,” she said. “We see anywhere from a low of 20 people to a high of 75 or 100 at an event like this.”
People can sign up online for either program — the MET enrollment deadline is September 30, and MESP is open year-round — but Lott said community events are particularly key to offer one-on-one assistance with the programs.
“These programs can be very complex and hard to explain,” she said.
The 529 Day event is especially important to Lott and her staff. Last year, the state sold only 2,250 MET contracts — a 10-year low. They had tried to reinvigorate the program by holding events in rural areas across Michigan, such as Ortonville. The strategy didn’t work out.
“When you drive into town and there’s only one stoplight, that’s not a good sign,” Lott said with a laugh. “We’d go to an event and see maybe two people.”
Statistics available for the MET program show a steady decline in the past several years — from 3,396 accounts opened in 2005 to 2,250 accounts opened in 2013. Anecdotally, Lott said she sees an overall decline in the number of MESP accounts opened as well, although the statistics she had available show a recent five-year increase, from 14,121 accounts in 2009 to 17,979 in 2013. No previous years were available. She estimates that about 3,000 people have signed up for MESP accounts since January 2014.
Lott said the challenge comes from trying to sell families on the idea of investment during tough economic times. “When I talk to families out in the field, they just feel like they can’t afford to save.”
Val Meyers, associate director at the Michigan State University Office of Financial Aid, said that she hears similar sentiments from families trying to send children to college. She said she also sees the burden of waiting to pay for college until a child is enrolled, and she encourages people to explore the MET or MESP savings plan whenever she can.
Michigan State University is the most popular school for students using a MET contract. Out of the 11,148 students who were using a MET contract as of last fall, MSU accounted for 2,634 of them.
Fewer people are saving when their children are young because of general economic decline, she said, but parents need to know how that approach hurts them in the long run. For example, the cost of a credit hour for an undergraduate, in-state student at MSU has more than doubled in the last 10 years, shooting from $206.25 to $428.75.
Programs like MET and MESP can really help lift the burden of rising college costs, she added.
“I always talk of this program,” she said. “Anything that you can save now matters. Anything saved is better than nothing.”