Michigan Governor Signs Legislation Creating New College Savings Option for Michigan Families

Michigan Governor Jennifer M. Granholm today signed into law House Bills 5138 and 5139, which will allow the Michigan Department of Treasury to create a broker-sold Michigan Education Savings Plan (MESP) to complement the current direct-sold MESP program. The new broker-sold program will help meet the needs of parents, grandparents, and others who plan their investments through a financial professional.

"We need to do all we can to help Michigan families pay for a college education for their children," Granholm said. "This program will give more families a tool they can use to make sure their kids go to college."

Because broker-sold programs offer sales incentives, the financial planning community becomes the plan's sales team. It is also important to note that the broker-sold plan will be selected through a competitive bidding process, which will limit costs charged to participants. Treasury expects to begin the bidding process in early 2008.

The direct-sold MESP plan, administered through TIAA-CREF, has been recognized as one of the best college savings plans in the nation. MESP currently hold $1.7 billion in investments on behalf of current and future college students. The State of Michigan also offers the Michigan Education Trust, the nation's first prepaid tuition program. The current MET enrollment period runs through August 31, 2008. MET recently exceeded $1 billion in assets on behalf of Michigan students.

"The State of Michigan is pleased to add another option to our well-respected college savings plans," said State Treasurer Robert J. Kleine. "With college costs increasing every year, there is no better time to start saving than today."

House Bill 5138 is now Public Act 153 of 2007; House Bill 5139 is now Public Act 154 of 2007.

Source: Michigan Governor

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