Parents who pay now may be saving thousands on their kids' college tuition down the road. That's the premise of the Michigan Education Trust, but as college costs go up, prepaid prices are also rising.
State officials say the average cost this year for a year of prepaid tuition will be about $7,200 at a four-year university. The cost is about $1,200 more than the previous year. Parents may also purchase tuition by semester. The average cost is approximately $3,600.
Michigan State University financial aid director Rick Shipman says parents may be better off managing their own money in savings and stocks rather than putting their cash in a state run tuition-only trust fund.
That's because it's hard to predict the cost of tuition down the road, and it's difficult to determine whether a child will want to attend in-state college when they're finished with high school.
If a child decides not to attend college when their MET fund matures, they can get only some of their money back. They will be reimbursed the cost of the least expensive public university college tuition in the state.
Shipman says people who choose to invest their own money may have more luck and win greater returns when their money matures. Plus, they will have more freedom to use their money as they please when it's time for their student to enroll in college.
The MET fund can only be used for college tuition, whereas, people who save their own money can use their funds for books and room and board.
The MET fund enrollment period begins December 15, 2003 - April 15, 2004.
People who want more information on the MET fund should log on to www.michigan.gov/treasure.