Michigan 529 Plan: What College Savers Should Know
Editor & Writer
Editor & Writer
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In June 2022, according to the Federal Reserve, Michigan held about $7.8 billion in 529 college savings accounts and $292 million in 529 prepaid tuition accounts.[1]
529 accounts help people save for college and come with tax advantages. But each plan works a little differently. Here's what to know about selecting a Michigan 529 plan.
Michigan 529
Michigan offers three 529s.
Two of Michigan's 529 plans are college savings plans, meaning they gain and lose money with the stock market. In the Michigan Education Savings Program, savers guide their own investments. In the Michigan 529 advisor plan, savers get help from financial advisors to choose portfolios and make other investment decisions.
Michigan's third 529 plan is a prepaid tuition account. Meaning you pay the cost of tuition now to lock in current prices. This protects you from the rising cost of college tuition in the future.
Find details about each plan below:
Michigan Education Savings Program
- Requires State Residency? No
- K-12 Expenses Eligible? No
- Fees: 0-0.185%
- Performance Notes: As of January 2023, the 2022/2023 Enrollment Option portfolio gained 2.46% in average annual returns in its lifetime.
MI 529 Advisor Plan
- Requires State Residency? No
- K-12 Expenses Eligible? No
- Fees: 0.42-1.82%
- Performance Notes: As of January 2023, the 2022/2023 Enrollment Portfolio gained 2.46% in average annual returns in its lifetime, not including fees.
Michigan Education Trust
- Requires State Residency? Yes
- K-12 Expenses Eligible? No
- Fees: 0%
- Performance Notes: This prepaid tuition plan is refundable if the beneficiary decides not to attend college.
Michigan 529 Tax Deduction
According to the College Savings Plan Network,[2] Michigan residents can deduct annual contributions to a state-sponsored college savings plan on their taxes — up to $5,000 if they're single and $10,000 if they're married and filing jointly.
In Michigan, you can contribute up to $500,000 in a single year and in total to college savings plans.
