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TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 1 T H E E D U C A T E D W A Y T O S A V E F O R C O L L E G E Welcome to our Presentation on.

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Presentation on theme: "TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 1 T H E E D U C A T E D W A Y T O S A V E F O R C O L L E G E Welcome to our Presentation on."— Presentation transcript:

1 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 1 T H E E D U C A T E D W A Y T O S A V E F O R C O L L E G E Welcome to our Presentation on Michigan’s 529 College Savings Plans

2 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 2 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 Lower Division (Freshman/Sophomore) Tuition Rates for Michigan Residents. *Estimating an annual 6% inflation factor per year for 18 years. College costs were cited from college websites as of January Estimated Cost of College COLLEGE COSTS Tuition & Fees Room & Board Total for 1 Year Total for 4 Years In 18 Years with 6% inflation Saginaw Valley State University* $8,175$8,678$16,853$67,412$192, University of Michigan* $13,486 $10,246$23,732$94,928$270, Alma College*$34,190$9,490$43,680$174,720$498,710.14

3 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 3 A Wise Investment An individual with a bachelor’s degree can make over $800,000 more over a working life time than someone with a high school diploma. Average annual income data is based on the U.S Bureau of Labor Statistics, Current Population Survey updated as of March * A doctorate or professional degree is the highest degree offered in a field of study, be it medicine, law, engineering, etc. Earnings per year $84,396 $69,108 $57,616 $40,404 $33,852 $24,544 $0$20,000$40,000$60,000$80,000$100,000 DoctoralorProfessionaldegree* Master’sdegree Bachelor’sdegree Associate’sdegree Highschooldiploma Lessthanahighschooldiploma

4 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 4 *Student Debt and the Class of 2013, November, 2014, as per the Institute for College Access and Success, Don’t do it with Debt* Average cumulative student debt in the state of Michigan is $29,583 63% of students who graduated in 2013 had student loan debt Average debt at almost one in five colleges increased 10%

5 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / Direct-sold College Savings Plan started in 2000 Over $4 billion in assets & 215,856 MESP accounts as of January 16, Treasury Review & Annual Audit First 529 Prepaid Tuition Plan implemented in 1988 Over $1.06 billion in assets & 103,705 Contracts (Dec. 2014) Actuarial Review & Annual Audit Michigan’s Section 529 Plans 529 Advisor-sold College Savings Plan started in 2009 Over $345.8 million in assets and 30,857 accounts (Dec. 2014) Treasury Review & Annual Audit

6 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 6 Michigan income tax deduction (annual) – MET - Total Contract Price – MESP - $5,000 (single) or $10,000 (joint) Michigan taxpayers are eligible to receive a Michigan income tax deduction of up to $10,000 a year for married couples filing jointly and $5,000 a year for individuals filing single on contributions made to MESP, less any Qualified Withdrawals made during the same tax year. Amounts transferred from another 529 college savings plan are not eligible for the Michigan income tax deduction. Tax Deferred Earning potential. Tax Free Withdrawals if used for qualified expenses. Treated as completed gifts for federal estate and gift tax purposes. Consult your Tax Advisor.

7 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 7

8 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 8 Michigan’s 529 Prepaid Tuition Plan Designed to allow parents, grandparents and others to prepay college tuition Purchasing a contract for tomorrow’s education at today’s 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 What is MET?

9 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 9 Full Benefits - in-state rate Limited Benefits - 105% WAT – 105% Weighted Average Tuition = $12,747 – UM-AA (26 cr.) - MTU (25 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 2014 Contract Options

10 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 10 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 – 40 basis points

11 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 11 Prepay by Semesters (1/2 years) – Maximum 10 Semesters (5 years) per beneficiary See Price Chart on page 20 Flexibility – Multiple contracts per beneficiary – Mix contract options – Now or later Flexible Purchase Options

12 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 12 Lump Sum Monthly Purchase - Use Payroll Deduction, ACH, Coupons – 1st monthly purchase due Feb. 25, May 25, Sept. 25, or Oct. 25 – No obligation to continue monthly purchases – Early payoff discount Payment Options

13 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 13 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 Portable

14 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 14 Refund Amounts for Fall 2014 Reason for not attending Mich. Public college: (Refund amounts for Full Benefits Contracts) Michigan private college – Weighted Average Tuition - $12,140 Out-of-state institution or full scholarship – Average Tuition - $11,676 Death, disability, not attending or military – Lowest Tuition - $9,680

15 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 15 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: Qualified Expenses*: tuition, fees, room, board, books, equipment required for enrollment *Earnings are taxed & 10% federal tax on the earnings apply if not used for qualified higher education expenses at a qualified institution. Qualified Institutions

16 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 16 Withdrawing Funds Withdrawals for qualified expenses are exempt from federal and Michigan income taxes Qualified Expenses Submit Forms or Withdraw Online Notice to Use MET Educational Benefits (form 3181) – Attending Mich. Public College or University Notice to Terminate a MET Educational Benefits Contract (form 2773) – Attending Mich. Private, Out-of-State, Full Scholarship, Not Attending College, Death or Disability To withdraw online visit and log into Customer Webwww.SETwithMET.com

17 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / Contract Enrollment Period – December 10, 2014 thru September 30, 2015 Read the Contract, then Enroll: – On line at – By Mail – Treasury Offices Help Line: MET-4-KID or (517) How to Enroll

18 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 18

19 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 19 What is MESP? A Savings Plan With tax advantages With Flexibility in choosing your investment options

20 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 20 TIAA-CREF TIAA-CREF Tuition Financing, Inc. is an affiliate of the TIAA-CREF group of companies and an industry leader in managing section 529 plans. Group of companies with a unique historical focus on serving educators. Over 90 years of investment experience Over $851 billion in assets under management as of December 31, 2014

21 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 21 Account Owner One account owner per account Valid Social Security Number U.S. address of record Contingent account owner No state residency required Full control Change beneficiaries

22 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 22 Beneficiary One beneficiary per account Need a valid Social Security Number to start No state residency required No age restrictions No time restrictions Beneficiary can be changed to another eligible family member of the original beneficiary. See the Disclosure Booklet for details.

23 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 23 Open an account with as little as $25 per investment option Contribute as little as $15 per investment option using payroll deduction Opening An Account

24 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 24 How can you make a contribution? Payroll deduction Bank account deduction (ACP) By check Gifts from family members and friends Opening An Account

25 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 25 Investment Options Conservative Age-Based Allocation Option Moderate Age-Based Allocation Option Aggressive Age-Based Allocation Option Balanced Option 100% Fixed-Income Option U.S. Equity Index Option Global Equity Index Option International Equity Index Option Principal Plus Interest Option Investment Options can vary in risk and objective. Please read the Disclosure Booklet prior to opening an account.

26 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 26 Investment Options – Age Based

27 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 27 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. Investment Options Risk level - Aggressive The Global Equity Index Option seeks to provide a favorable long-term total return, mainly from capital appreciation, by investing in equity mutual funds. Because of the high exposure to domestic and foreign equities, and the corresponding high degree of risk, this Option may be appropriate for you if you already have substantial college savings from less volatile investments (e.g., fixed-income investments) or you have a long time until college and can tolerate a higher level of risk. Risk level - Moderate The Balanced Option seeks to provide a favorable long-term total return by investing in a balanced mix of equity and fixed- income mutual funds. Because of the high exposure to domestic and foreign equities, and the corresponding degree of risk, this option may be appropriate for you if you can tolerate a degree of volatility in exchange for potentially higher returns over time.

28 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 28 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. Risk level – Conservative The 100% Fixed-Income Option seeks to provide preservation of capital along with a moderate rate of return through a diversified mix of fixed-income investments. This Option may be appropriate for you if you have a medium to short investment time horizon and can tolerate a moderate level of risk. Risk level – Aggressive This investment option seeks to provide a favorable long-term total return, mainly through capital appreciation by investing in international and emerging markets index funds.

29 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 29 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. Investment Options Risk level – Aggressive The U.S. Equity Option invests 100% of its assets in one “index fund,” meaning that the fund attempts to track a benchmark index.

30 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 30 Choosing Your Investment 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.

31 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 31 Low Cost Program Annual asset-based management fee of just $ per $1,000 annually (low % 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 More of your investment can go toward education expenses, not account administration

32 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 32 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

33 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 33 Qualified Expenses Online Withdrawals Download or request a withdrawal request form KEEP RECEIPTS FOR YOUR RECORDS Withdrawals for qualified expenses are exempt from federal and Michigan income taxes * Enrollment must be at least half-time with expenses eligible up to a specified level. Check the Disclosure Booklet for details. Tuition and Fees Books Certain Room & Board* Required Supplies Qualified Expenses Withdrawing is easy

34 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 34 Similarities and Differences SIMILARITIES  Both are Section 529 qualified tuition programs  State income tax deductions or plan contributions  Any earnings are tax exempt for qualified withdrawals  Low Cost, No Commissions  Transferable to eligible 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 owner’s asset for financial aid purposes. Consult your tax advisor.*  Rollovers accepted from other 529 programs, consult your tax advisor. MET  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-of- state institutions  Purchase for Michigan children – no age limit  15 years to use or refund  Forget about tuition increases, you are locked in MESP  Investment account with nine investment options  Use at any eligible educational institution  Use funds for qualified higher education expenses  Open an investment account with as little as $25  One change in investment strategy allowed every twelve months  No age or time limit to use funds The treatment of investments in a 529 savings plan varies by school. Assets are typically treated as the account owner's and not the student's. Any investments, including those in 529 accounts, may affect the student's eligibility to get financial aid based on need. You should check with the schools you are considering regarding this issue.

35 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 35 Website Resources Gift Templates Calculators Webcasts Forms Promotions

36 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 36 For More Information 800-MET-4-KID (517) – 8 AM to 5 PM 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.

37 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 37 Resources

38 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 38 T H E E D U C A T E D W A Y T O S A V E F O R C O L L E G E Thank you for joining us

39 TIAA-CREFTuition Financing, Inc. 1/29/15 Program Manager / 39 MESP Disclosures The Michigan Education Trust (MET) is administered and managed by the Michigan Department of Treasury. The Michigan Education Savings Program (MESP) is administered by the Michigan Department of Treasury. TIAA-CREF Tuition Financing, Inc. is the MESP Program Manager. Before investing in a 529 plan, consider whether the state where you or your Beneficiary resides has a 529 plan that offers favorable state tax benefits that are available if you invest in that state’s 529 plan. Consider the investment objectives, risks, charges and expenses carefully before investing in MESP. Please visit for a Program Disclosure Booklet containing this and other information. Read it carefully. Investments in the Program are neither insured nor guaranteed and there is the risk of investment loss.www.MIsaves.com The tax information 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 may be subject to federal and state taxes and the additional federal 10% tax. TIAA-CREF Tuition Financing, Inc., Program Manager C21811


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