T H E E D our T E D W A Y T S Michigans O L Plans Welcome toU C A PresentationOon A V E F O R C529 L E G E

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Cost of College
2010-11
Tuition & Fees

2010-11
Room & Board

2010-11
Total Per Year

Estimated Cost for 4 years of college in 2010-11 without inflation

Estimated Cost for 4 years of college* in 18 years

Saginaw Valley University University of Michigan Alma College

$ 6,955 $11,837 $29,230

$ 7,768 $ 9,912 $ 8,840

$14,723 $21,749 $38,070

$ 58,892 $ 86,996 $152,280

$178,227 $263,280 $460,852

Additional costs may include registration fees, text book and supplies, mandatory fees, transportation, parking passes, athletic fees, recreational facilities pass, computer lab costs, legal services, health service fee, etc Reflects In-state Tuition Rates for Michigan Residents. *Estimating an annual 6% inflation factor per year for 18 years. Source: National Center of Education Statistics, IPEDS College Opportunities On-Line, 2007-2008 school year. ** College costs were taken from cited from college websites. www.svu.edu, www.umich.edu, www.alma.edu
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A Wise Investment
The lifetime gap in earning potential between a high school diploma and a BA exceeds $800,000
$95,700 $79,400 $59,500 $49,900 $30,800
High School

$37,600
Associate Bachelor's Master's Doctorate Professional

*Source: U.S. Census Bureau, 2006, PINC-03: IRS. as cited in The College Board, Education Pays Update, 2007. Assumes 35 years in work force and non-taxable income. www.collegeboard.com

Dont do it with Debt

Average cumulative student debt is $24,651* 6% increase since 2008 Among graduating 4 year undergraduate students who applied for federal student aid, 86.3% borrowed to pay for their education 54% of Financial Aid is in the form of loans Graduate and professional students borrow even more with the additional cumulative debt for a graduate degree ranging from $30,000 to $120,000

National Center for Education Statistics, 2009

Michigans Section 529 Plans

First 529 Prepaid Tuition Plan implemented in 1988 $905.6 million in assets & 96,090 Contracts (August 2011) Actuarial Review & Annual Audit

529 Direct-sold College Savings Plan started in 2000 $2.6 billion in assets and 223,600 accounts (August 2011) Treasury Review & Annual Audit

529 Broker-sold College Savings Plan started in 2009 $76.8 million in assets & 9,872 accounts (August 2011) Treasury Review & Annual Audit

MET & MESP Tax Benefits

Michigan income tax deduction (annual) MET Total Contract Price MESP - $5,000 (single) or $10,000 (joint) Tax Deferred Earnings/Growth

Tax Free Withdrawals if used for qualified expenses

Treated as completed gifts for federal estate and gift tax purposes

What is MET?
Michigans 529 Prepaid Tuition Plan Designed to allow parents, grandparents and others to prepay college tuition Purchasing a contract for tomorrows education at todays cost

Purchase credit hours

Provides in-state tuition and mandatory fees at any Michigan public college/university Transfer of risk

Funds pooled together for investment purposes

Secured by the assets of the Trust

Choice of Contract Options

Full Benefits - in-state rate Limited Benefits - 105% WAT

105% Weighted Average Tuition = $10,837 UM-AA (25 cr.) - MTU (26 cr.) - MSU (27 cr.)*

Community College - in-district rate

Contract constitutes a completed gift for benefit of a minor - age 18/h.s. graduate
*As of Fall 2011

Purchasing a Contract
One Purchaser per contract One Beneficiary per contract Beneficiary must be Michigan resident No age restrictions Name a Contingent Contract Purchaser Transferable to an immediate family member (no residency requirement) Low fee program 30 basis points

Portable

Use Your MET Contract:

In-state tuition at Michigan public colleges and universities Use at Out-of-State colleges and Michigan independent colleges With partial scholarships To transfer among colleges Towards a graduate degree (AP credits) Within 15 years

Payment Options
Lump Sum Monthly Purchase - Use Payroll Deduction, ACH, Coupons

1st monthly purchase due Feb. 25, May 25, or Sept. 25 No obligation to continue monthly purchases Early payoff discount

Flexible Purchase Options

Prepay by Semesters (1/2 years)

Maximum 10 Semesters (5 years) per beneficiary

See Price Chart on page 35 Flexibility

Multiple contracts per beneficiary Mix contract options Now or later

Refund Amounts for Fall 2011

Reason for not attending Mich. Public college:
(Refund amounts for Full Benefits Contracts)

Michigan private college

Weighted Average Tuition - $10,321 Average Tuition - $10,109

Out-of-state institution or full scholarship

Death, disability, not attending or military

Lowest Tuition - $7,499

Qualified Institutions

Lowest tuition refund can be used at any certificate or degree granting institution that offers financial aid to their students Go to U.S. Dept. of Education Web site: www.ed.gov Qualified Expenses*: tuition, fees, room, board, books, equipment required for enrollment
*Earnings are taxed & 10% fed. excise tax on the earnings apply if not used for qualified higher ed expenses at a qualified institution.

Withdrawing Funds
Withdrawals for qualified expenses are exempt from federal and Michigan income taxes

Submit Forms
Notice to Use MET Educational Benefits

(form 3181) Attending Mich. Public College or University Notice to Terminate a MET Educational
Qualified Expenses Benefits Contract (form 2773) Attending

Mich. Private, Out-of-State, Full Scholarship, Not Attending College, Death or Disability

How to Enroll

2012 Contract Enrollment Period

To be announced

Read the Contract, then Enroll:

On line at www.SETwithMET.com By Mail Treasury Offices

Help Line: 1-800-MET-4-KID or (517) 3354767

What is MESP?

A Savings Plan

With tax advantages

With Flexibility in choosing your investment options

TIAA-CREF
Unique focus on education

Over 90 years of investment experience

Over $419 billion in assets under management*

An industry leader in managing 529 plans

* As of March, 2011

Account Owner
One account owner per account Valid Social Security Number U.S. address of record Contingent account owner No state residency required
Beneficiary

Account Owner

Beneficiary
One beneficiary per account
Need a valid social security number to start No state residency required No age restrictions No time restrictions

Full control

Change beneficiaries

Beneficiary can be changed to another eligible family member of the original beneficiary

Opening An Account

Open an account with as little as $25 per investment option Contribute as little as $15 per investment option using payroll deduction How can you make a contribution?

Payroll deduction Bank account deduction (ACP) By check Gifts from family members and friends

Investment Options
Investment Options can vary in risk and objective. Please read the Disclosure Booklet prior to opening an account.

Moderate Age-Based Allocation Option Conservative Age-Based Allocation Option Aggressive Age-Based Allocation Option 100% Equity Option Balanced Option 100% Fixed-Income Option Principal Plus Interest Option

Investment Options Age Based

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Investment Options

Underlying investments are TIAA-CREF Institutional Mutual Funds. Investments in foreign securities are subject to special risks, including currency fluctuation and political and economic instability. These investment risks may be magnified in emerging markets. Investment Performance is not guaranteed.
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Investment Options

Effective October 1, 2011, accumulations (including contributions and earnings) under the Funding Agreement for the Principal Plus Interest Option as of September 30, 2011 will be credited to MESP with an effective annual interest rate of 1.85%, and are guaranteed to earn this rate through September 30, 2012, subject to the claims-paying ability of TIAA-CREF Life Insurance Company.

Underlying investments are TIAA-CREF Institutional Mutual Funds. Investments in foreign securities are subject to special risks, including currency fluctuation and political and economic instability. These investment risks may be magnified in emerging markets. Investment performance is not guaranteed.

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Choosing The Best Option

Choose a combination of options Allocate new contributions to any option Transfer between options once per calendar year for the same beneficiary or upon a change of beneficiary

*Note:

The investment approaches described are not recommendations and do not take into consideration personal goals or preferences. After evaluating all the information, the ultimate decision is up to the account owner.

Low Cost Program

More of your investment can go toward education expenses, not account administration

Just $3.50 per $1,000 annually (low 0.35% fee) Management fee is used to cover the cost of investment management and administration services No other fees or charges will be applied to your account

Qualified Institution
Any qualified institution in the nation and some abroad

Private or Public College, University, or Community College Trade or Career School For any type of degree or certificate program

www.ed.gov

*Note:

The investment approaches described are not recommendations and do not take into consideration personal goals or preferences. After evaluating all the information, the ultimate decision is up to the account owner.

Qualified Expenses
Withdrawals for qualified expenses are exempt from federal and Michigan income taxes Qualified Expenses
Tuition and fees Books Certain room & board*

Withdrawing is easy

Required supplies

*Enrollment

must be at least half-time with expenses eligible up to a specified level.

Online Withdrawals Download or request a withdrawal request form KEEP RECEIPTS FOR YOUR RECORDS

Comparing College Savings Alternatives

Custodial Accounts

Savings Bonds

USEEOURUCOMPARISON CHARTVAT F O R C O L L E G E TH E D C A T E D W A Y T O S A E MISAVES.COM

Roth IRAs

Coverdell ESAs

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Comparison Chart on www.misaves.com

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Similarities and Differences

MET

SIMILARITIES

Prepay tuition with three contract options Purchase credit hours, in semester increments, at today's prices for future use Best benefit at Michigan public institutions for tuition and mandatory fees Refund amounts payable to in-state private or out-ofstate institutions Purchase for Michigan children no age limit 15 years to use or refund Forget about tuition increases, you are locked in

Both are Section 529 qualified tuition programs State income tax deductions Earnings are tax exempt for qualified withdrawals Low Cost, No Commissions Transferable to immediate family members Fund with after tax dollars Contribute with payroll deduction, ACH or coupons Can be used separately or together ($235,000 max.) Recognized as owners asset for financial aid purposes Rollovers accepted from other 529 programs

MESP

Investment savings account with seven investment options Use at any "eligible educational institution" Save for all qualified higher education expenses Open an investment savings account with as little as $25 One change in investment strategy every twelve months No age or time limit to use funds

Website Resources

Gift Templates Calculators Webcasts Forms Promotions

www.setwithmet.com

www.misaves.com

For More Information

www.SETwithMET.com 800-MET-4-KID (517) 335-4767

8 AM to 5 PM

www.misaves.com 877-861-MESP

8 AM to 8 PM

Be sure to read the MET Contract Enrollment Booklet and/or the MESP Program Disclosure Booklet before investing, which are available on-line or from the Programs at the numbers listed above.

Resources

www.setwithmet.com

www.misaves.com
www.collegeboard.com

www.collegesavings.org
www.savingforcollege.com www.finaid.com www.ed.gov

T H E E D U Thank youY T O S A V E us R C O L L E G E C A T E D W A for joining F O

MESP Disclosures

Non Michigan residents or individuals with taxable income in another state should evaluate benefits & tax treatments of other state 529 options prior to investing in MESP Consider the investment objectives, risks, charges and expenses carefully before investing in MESP. Please visit www.misaves.com for a Disclosure Booklet containing this information. Read it carefully. The tax information herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties. It was written to support the promotion of the MESP. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

TIAA-CREF Tuition Financing, Inc. , Program Manager