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Frequently Asked Questions - Opening and Account, Contributions and Fees

		How do I open an account? Who can open an account? How do I contribute to MESP? What is the maximum that I can contribute to an account? Can I take a distribution from both a MESP and Coverdell Educations Savings Account to pay for expenses in the same year? Are there any fees associated with opening a MESP account? How do I keep track of my account?

Who can open an account?
Any individual with a valid social security number or federal taxpayer identification number who is a U.S. citizen or resident alien can open an account and contribute to MESP on behalf of any beneficiary. The beneficiary must have a valid social security number or federal taxpayer identification number and be a U.S. citizen or resident alien. An organization described in Section 501(c)(3) of the Internal Revenue Code, an estate or a trust may also open an account. Such entities will be subject to additional restrictions or administrative requirements. You can even open an account for yourself. Open an Account.

How do I contribute to MESP?
You can open an account with a $25 check, electronic funds transfer, or by Automatic Contribution Plan. You can also contribute as little as $15 per investment option per pay period using payroll deduction through participating employers. Each account can have only one account owner and one beneficiary. However, each beneficiary may have more than one account and, you may open separate accounts for as many different beneficiaries as you wish. To set up an automatic contribution plan or payroll deduction, log in to your account or use the Account Services form (PDF, 60KB).

What is the maximum that I can contribute to an account?
There is no annual limit on the amount you may contribute. However, there is an overall maximum account balance limit of $235,000 which applies to all accounts opened for a beneficiary (including amounts deposited in the Michigan Education Trust program, a prepaid tuition program established by the State of Michigan). An account owner may contribute to a beneficiary's account if, at the time of the contribution, the total balance of all accounts (including prepaid tuition accounts in the Michigan Education Trust program) for that beneficiary does not exceed $235,000. Accounts that have reached the Maximum Account Balance Limit may continue to accrue earnings.

Can I take a distribution from both a MESP and Coverdell Educations Savings Account to pay for expenses in the same year?
Yes. However, you must apply the distributions to different eligible expenses in order to obtain the favorable tax treatment. See IRS Publication 970 for more detail.

Are there any fees associated with opening a MESP account?
With MESP, there are no sales charges, start-up or maintenance fees. An annual asset-based management fee will be paid to TIAA-CREF Tuition Financing, Inc. (TFI) to cover the cost of investment management and administrative services. TFI is an affiliate of TIAA-CREF Individual and Institutional Services, LLC, the distributor for MESP. This fee is computed at an annual rate of 0.45% (less than one percent) of the average daily net assets of MESP (excluding assets held in the Principal Plus Interest Option. The Principal Plus Interest Option provides a guarantee of principal and a minimum rate of interest to MESP, but not to account owners or beneficiaries. No other fees or charges will be applied to your account. Please note however, that the state reserves the right to change the current fee and impose new or additional fees, expenses, changes, or penalties in the future. See fee table and sample investment cost.

How do I keep track of my account?
You have online access to your account information 24 hours a day, or you can call and speak to one of our non-commissioned college-savings experts at 1 877-861-6377 Monday through Friday, 8:00 am - 8:00 pm Eastern Time. You'll receive quarterly and annual statements that show account activity. A separate statement will also be mailed, which lists every transaction made to the account. (Quarterly statements will be provided for periodic payment plans, such as payroll deduction.) Access Your Account.