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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 Plans

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2010-11

Tuition & Fees

2010-11

Room & Board

2010-11

Total Per Year

EstimatedCost for 4 years of college in 2010-11 without inflation

Estimated Cost for 4 years of college* in 18 years

Saginaw Valley University

$ 6,955 $ 7,768 $14,723 $ 58,892 $178,227

University of Michigan

$11,837 $ 9,912 $21,749 $ 86,996 $263,280

Alma College $29,230 $ 8,840 $38,070 $152,280 $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

Cost of College

A Wise Investment

$30,800$37,600

$49,900$59,500

$79,400

$95,700

High School Associate Bachelor's Master's Doctorate Professional

The lifetime gap in earning potential between a high school diploma and a BA exceeds $800,000

*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

• National Center for Education Statistics, 2009

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

Don’t do it with Debt

529 Direct-sold College Savings Plan started in 2000

$2.6 billion in assets and 223,600 accounts (August 2011)

Treasury Review & Annual Audit

First 529 Prepaid Tuition Plan implemented in 1988

$905.6 million in assets & 96,090 Contracts (August 2011)

Actuarial Review & Annual Audit

Michigan’s Section 529 Plans

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

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?

Full Benefits - in-state rateLimited 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

Choice of Contract Options

Purchasing a Contract

One Purchaser per contractOne Beneficiary per contract Beneficiary must be Michigan residentNo age restrictions Name a Contingent Contract PurchaserTransferable to an immediate family

member (no residency requirement)Low fee program – 30 basis points

Use Your MET Contract: In-state tuition at Michigan public colleges and

universitiesUse at Out-of-State colleges and Michigan

independent collegesWith partial scholarshipsTo transfer among collegesTowards a graduate degree (AP credits)Within 15 years

Portable

Lump SumMonthly Purchase - Use Payroll

Deduction, ACH, Coupons1st monthly purchase due Feb. 25, May

25, or Sept. 25No obligation to continue monthly

purchasesEarly payoff discount

Payment Options

Prepay by Semesters (1/2 years)Maximum 10 Semesters (5 years) per

beneficiarySee Price Chart on page 35Flexibility

Multiple contracts per beneficiaryMix contract optionsNow or later

Flexible Purchase Options

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

Out-of-state institution or full scholarship Average Tuition - $10,109

Death, disability, not attending or military Lowest Tuition - $7,499

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.

Qualified Institutions

Withdrawing Funds

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

Qualified Expenses

Submit Forms

• 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

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) 335-4767

How to Enroll

What is MESP?

A Savings Plan With taxadvantages

With Flexibility in choosing

your investment options

TIAA-CREF

An industry leader in managing 529 plans

Unique focus on education

Over 90 years of investment experience

Over $419 billion in assets under management*

* As of March, 2011

Account Owner

Beneficiary

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

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

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

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

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Investment Options – Age Based

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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

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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

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.

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 ProgramMore 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 InstitutionAny 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

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.

• Tuition and fees

• Books

• Certain room & board*

• Required supplies

Qualified Expenses

Withdrawing is easy

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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 USE OUR COMPARISON CHART AT MISAVES.COM

Comparing College Savings Alternatives

Coverdell ESAs

Custodial Accounts Savings Bonds

Roth IRAs

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Comparison Chart on www.misaves.com

Similarities and Differences

SIMILARITIES

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 owner’s asset for financial aid purposes

Rollovers accepted from other 529 programs

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 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.com800-MET-4-KID(517) 335-4767

8 AM to 5 PM

www.misaves.com877-861-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 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

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