A Matched Education Savings Account (MESA) is a particular type of Individual Development Account (IDA). IDAs are special matched savings accounts for people with lower incomes that are designed to help families and individuals of modest means establish a pattern of regular saving and, ultimately, purchase a productive asset. A productive asset is something of value that is likely to return substantial long‐term benefits to its owner. While your paycheck helps you to buy food and clothing and pay your bills each month, an asset provides financial security for the future.
Typically, IDA savings and match money can be used to buy a house, pay for education, or start a small business. Most IDA programs focus on a particular type of asset like education or home ownership. The MESA programs are dedicated to helping participants save for post‐secondary education.
A savings match is a promise to supplement a MESA or IDA participant’s savings deposit at a specific rate. For example, a 3:1 savings match means that for every dollar a participant saves as part of the program, he or she will receive another three dollars. So if you save $500 throughout the course of the program (and meet all the other program requirements), you will earn a $1,500 match to purchase the agreed upon asset. The maximum match that the participant will be eligible to receive is dependent on their particular MESA program. Matched funding may not be used to pay toward student loans or housing. To take full advantage of the program, participants should save $500 to earn a full match at the end of the program.
In the MESA program, deposits will be made at one of our partner credit unions into a restricted account owned by the individual participant: no withdrawals are made from the MESA without written consent of both the participant and the MESA credit union program coordinator. The MESA program participant deposits will earn interest at the rate in effect for non‐MESA credit union accounts and will have all monthly service charges or fees waived.
MESA participants agree to:
- Make monthly savings deposits of at least $25.00 for at least 6 months
- Participate in personal finance/money management training and post-secondary planning
- Maintain regular contact with program representatives
IDA programs are dedicated to helping underserved and low-income populations, and each program has its own individual eligibility requirements. In order to be a part of the MESA program the individual or family must meet all of the following four qualifications:
- Have an annual household income at or below 200% of federal poverty levels or income at or below the earned income tax credit threshold. (The federal poverty guidelines are calculated by the number of people in your household and your annual income. These income levels are listed in the tables below.)
- Do not have household net worth exceeding $10,000. (In determining net worth, the primary dwelling and one motor vehicle owned by a member of the household will be excluded.)
- The applicant must have earned income
- The applicant must be a state resident enrolled at one of the participating schools. For the Montana GEAR UP program, an applicant must be enrolled at a Montana GEAR UP High School.
Absolutely. The main goal of the MESA program is to provide each participant with a set of tools that will enable them to make well‐informed choices and continue to build their assets long after the program ends. To achieve this, participants receive financial education to help them acquire or polish the personal and financial skills essential for long term success—skills like budgeting/spending plans, working with checking and savings accounts, understanding credit and credit reports, and avoiding fringe banking services and predatory lending. Participants who receive financial education and counseling over the course of the program have a far better chance for long-term success.
Participants may access their MESA funds once they have completed the program requirements and are ready to purchase their asset goal (see what asset purchases are allowed below). At that time a check will be issued directly to the school, where the participant is enrolled as a student, or to an approved vendor.
When the participant is ready to have a check issued from their MESA savings and match, they must complete a Qualified Withdrawal Request form within their online Vista Share portal they have established with their application, submit an invoice from the vendor or institution. Once a request is approved, the participating credit union will write a check from the participant’s Matched Education Savings Account directly to the vendor or institution. The MESA savings and match will never be given directly to the participant. If paying for tuition, you must present a copy of an outstanding tuition bill. It is your responsibility to time your withdrawal request before your financial aid goes through. Allow 10 days for the check to be issued for the vendor or institution.
The MESA program is designed to help participants save to meet the costs of obtaining education or to buy resources that can lead to their future success. All purchases must be a part of the participant’s stated goals and approved by the project partners. Participants may use the money in their MESA to pay for tuition and fees, books, supplies, and equipment required for courses at their qualifying school. Matched funding may not be used to pay for housing or student loans.
This is a question that you and the MESA Credit Union program coordinator will answer together. If you meet the eligibility requirements and would like to save for post‐secondary education and/or training, then participating in the MESA program could be an ideal way to reach your goal. Each person and situation is different—so take the time to ask questions and learn as much as you can about the program. A representative from the MESA program will be happy to help you determine whether it is an appropriate program for your own asset goals and whether you are eligible based on income requirements.
The savings in a MESA is considered a protected asset. That means, according to Assets for Independence legislation (SEC. 415. No Reduction in Benefits), MESA savings accounts are exempt as an asset for determination of entitlement grants such as Pell and state funds. The saved portion of the MESA is excluded from being counted as an asset when determining the Estimated Family Contribution (EFC). Since the saved money does not affect the EFC, then the saved money will have no effect on the student’s access to financial aid.
The savings in a MESA is excluded from being counted as an asset when determining Estimated Family Contribution. However, the matched money that the participant earns will most likely be considered an outside resource. Financial aid offices should treat the matched money as they treat any other outside scholarship; it should help decrease the amount of loans the participant needs to take out and would then decrease the amount of campus‐based aid such as work study, Perkins loans, and other institutional grants and loans.
Generally, these institutions do not penalize low-income individuals for saving and accessing outside grant resources, as it is counter to their philosophy of access. In a few extreme cases where MESA savers also had an extraordinary amount of other outside scholarships, federal work study and loan aid was decreased. In these cases, as with other scholarship funds, MESAs helped the low‐income students cover school costs with less debt and work obligations.
