MISSISSIPPI

Mississippi Affordable College Savings

Type: Savings

Phone: 800-486-3670

State tax deduction for residents: Deductions for contributions up to $10,000 per year ($20,000 for joint filers)

Open to nonresidents: Yes

Refund provisions: Penalty of 10% of earnings

Minimum/maximum contributions: $25 / $235,000

Like most TIAA-CREF plans, this one has few investment options, and they have posted mediocre returns in the past year. The age-based portfolio has slightly outpaced its peers over the past one but posted well above-average three-year returns, thanks to conservative investments. There also is a 100% equity option and a guaranteed option. Fees are 0.7% of assets annually plus the management fees for each underlying fund that range from 0.16% to 0.23%.

Mississippi residents have a strong incentive to stay in state, because they can deduct up to $10,000 per year in contributions ($20,000 for married couples). Withdrawals from this plan, but not those from other states' plans, are state-tax-free (the top tax rate is 5%).

Nonresidents who like a conservative investment approach may want to look at other TIAA-CREF plans, which have performed similarly and have lower expenses.

Mississippi Prepaid Affordable College Tuition Program (MPACT)

Type: Prepaid (contract)

Phone: 800-987-4450

State tax deduction for residents: Deduction for full amount of contribution

Open to non-residents: No

Refund provisions: You get back contributions plus savings-account rate of interest, less $150 fee.

Enrollment period: September-November

Minimum/maximum contributions: $1,229 for one year at community college for a newborn / $19,850 for five years at a senior college, for a 10th-grader.

The Mississippi Prepaid Affordable College Tuition Program (MPACT) may be a good buy for a high schooler with an eye on a more expensive Mississippi public school, such as the University of Mississippi or Mississippi State -- because contract prices are based on average tuition rates in the state. But penalties are tough if you don't use the money for college (or if you don't need the contract because of a scholarship) -- you get back your contributions plus a bank interest rate (recently 2%), less a $150 cancellation fee and account maintenance fees. Other fees include $60 to enroll.

The plan is fully backed by the state.

State College Savings Plans