All students who graduate from Kalamazoo Public Schools and are Kalamazoo residents can get up to 100% of their tuition paid to any Michigan public university or community college. Students must take 12 credit hours or more each semester, unless interrupted for military service, and maintain at least a 2.0 grade-point average.
The percent of tuition paid by the plan depends on the years of attendance in the district, using the following formula:
If you have a child entering the 9th grade next year (assuming tuition of $10,000 a year for ease), a move to Kalamazoo would be worth $26,000 in saved tuition. If you have three children with one going into kindergarten, one into 3rd grade and one into 6th grade, the move would be worth $110,000 in college tuition. To further increase the worth of the tuition payments, they will be to the kids and not the parents meaning that the taxes owed on the gifts will be much less.
In fact, the grant of free tuition will probably be worth a lot more than merely the tuition. Since the announcement, colleges in Michigan have been tumbling over one another trying to lure the students that are receiving the free tuition by offering discounted to free room and board and other incentives to attend their college. They are able to do this because most students receive financial aid of some type when they go to college. Since those from Kalamazoo have their tuition already paid, there is no reason to offer those students financial aid. Therefore the colleges are taking the financial aid portion and moving it toward other benefits increasing the worth of the free tuition offer.
Then all the savings for college made thus far for your children could be earmarked for retirement savings giving you a huge boost in your personal net worth and outlook for retirement. This means that you could start maxing out your retirement funds (401K or IRA) if you haven't been doing so up to this point further increasing your retirement money.
The offer is especially appealing to middle income families that would have a difficult time paying for college, but earn enough that scholarships and grants would be limited for their child.
Of course, there are a lot of other factors involved that come into play when determining whether a move is even feasible. It is, however, certainly worth careful consideration to see if a move makes financial sense.
It also makes sense to keep your eyes on this type of offer. Since the announcement a lot of other small towns have expressed interest in creating a similar system for their school children. While Kalamazoo may not be possible today, another offer in a different town in the future may be.