College Planning

Updated on January 31, 2011
J.W. asks from Pontiac, MI
8 answers

Ok - I know that this should have been taken care of years ago, but I get so overwelmed when I try to understand all of the differences between the savings plans out there that I end up setting the task aside every time.

If you have begun a college savings plan for your child (MET, or ANY other time of savings) can you let me know what you think of it, why you chose that plan and the basics of it along with the pros and cons?

I am sure that they are not a complicated as I make them out to be, but I need help!


Oh - My son is 7 and I have one on the way, if that makes a difference.

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answers from Detroit on

We have the Michigan Educations Savings Program (MESP.) Here is the link
I like it because it gains interest and doesn't have different coverage for in-state vs.out-state tuition. Plus they give "deposit" slips so if others want to send money (grandparents, aunts, etc.) they can mail in a slip with the amount they want to send. Plus it's tax-deductible!

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answers from Detroit on

I have an MESP plan for each of my kids - I like it but because I haven't actually used it yet, it's hard to give any additional pros or cons beyond what people have posted below.

I do, however, disagree with the poster that says kids should pay for their own college because they need to learn responsibility. I do recognize that not all parents can afford to pay for (or even help) their kids' college. But if you're willing and able, I think it's an amazing thing. My husband and I were both blessed with parents who paid for our college educations (tuition and room&board). But with both of us, there was no money given for spending money - we both had to work to earn any day-to-day spending money (which did help to teach us responsibility). And when we graduated without student loans, we were so much better off, financially, than our peers who had (and still have) student loans. Not to say that student loans are bad because they're absolutely neccessary for many. I guess my point is that if you can help your kids, that's a wonderful thing. My husband and I plan to "pay it forward" by doing the same thing for our own kids.

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answers from Charlotte on


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answers from Dallas on

We started saving for college before our now 16 yr old was born. We are both well educated and college is not an option... it is something she has had ingrained in her brain so that she has a better chance to be successful later in life. She would not dream of not going to college. She loves visiting the colleges now and can't wait for her experience.

That said, our goal was $10,000 per year by her birthday each year. Some years when we did really well, we'd put more in it. She has high aspirations and we expect to pay roughly $250,000+ to get her finished with college debt free. Our daughter does want to study in Italy for 1 yr and we are planning for that (it's included in the #). Right now, she is fully funded and actively making college visits, etc.

This completely depends on your family, your child. Some families do not value the education as we do and that is OK. Every family is different.

We feel it is our parental responsibility to get her out of college debt free. We live debt free and she should at least be given a debt free start.

All that said, it is also important to fully fund yourself for your retirement. Don't forget about that part either.!!

Best wishes to you!

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answers from Detroit on

I don't know very much about these specifically, but I would say to make sure that this "college" plan doesn't penalize you if your child/children don't go to college.



answers from Grand Rapids on

why are you planing on paying for his college. My parents didn't pay for mine, and i don't plan on paying it for my kids. they have to learn responsibility. And they are starting from teh beginning by learning to save their money and they pay for their own college. my husband had an apprenticeship for his college and so he paid for what wasnt' covered.

I am still paying off my college loans and that's fine with me. In college it wa VERY easy to pick out kids who had parents paying and who paid on their own. Yes there were people who were studious and had their parents paying for them, but when someone else is paying the bill their is NO personal responisiblity at all.

I do plan on helping if they need it by way of a LOAN, and it will be paid back to me. I am sure there will be enough moms that criticize me, but i know their are a lot others who will agree.

Yes i am sure my husband and i can financially support the kids in college, but if i delay them learning their own respsonisibly when do they learn. This way they can learn and i can help them where possibile, instead of when they move away from home and are in a jamb so far away that they don't say anything abou t it.



answers from Detroit on

I would highly recommend the MESP program. It is always highly rated with low fees, it has age adjusted programs, so you can just set it and your investments become more conservative as your child gets closer to college age. The best thing about MESP is that it is state tax deductible--that's an automatic 4% return that you won't get anywhere else (up to $10,000 per year). You can use it for ANY college, and if you don't end up using it, you can transfer it to another beneficiary (including yourself) without any charges. It takes between 5-10 minutes to set it up online.



answers from Dallas on

We set up a 529, but each state is different in their penalties for taking money out if it isn't for college. The good thing about most 529s is that you can get one from any state, it doesn't need to be the state you are living in; however, some brokers are only allowed to offer up their state. Last I checked Utah and Virginia had the best return on your investment, with the smallest penalty. Also, if you son doesn't go to college or gets a full ride to college you can use it for anyone in your family. You may have to pay a penalty if you take out the money for non-college reasons, but you will still be making money on the investment, that it maybe worth taking a risk of potentially having to pay the penalty.

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