MET is operating under certain well-specified assumptions concerning tuition increases, future market conditions and rates of return on the fund. Parents of children enrolled in MET are operating under an additional assumption – that the program is a future "guarantee" for college tuition.

Officials have stressed this "guarantee" aspect, although the trust is not fully backed by the "full faith and credit" of the State of Michigan. "MET," promotional literature states, "guarantees in-state or in-district undergraduate tuition and mandatory fees" at state public colleges and universities "for the number of credit hours purchased. Parents may guarantee the number of credit hours required for a standard four-year undergraduate degree at any Michigan public college or university. Purchasers may also guarantee less than four years of tuition." [21]

Ultimately, MET is a political, rather than an economic guarantee. Officials understand that defaulting on MET would be prohibitively costly because the program's middle and upper-income enrollees would never tolerate such a default. State Treasurer Bowman has conceded as much, stating, "Let's say that something does go wrong with the program, and the state government does step up to it, although as you've both already pointed out, quite correctly, it's not the full faith and credit of the state. It's the full faith and credit of the trust. If we do step up, obviously we're not going to seek a tax increase to step up...what we'll be doing is dedicating more and more of our state revenues to college education from some other budget. (emphasis added). Frankly, I don't see a problem with dedicating more and more of our budget toward education, either K-12 or college education ...if it does (go belly up) we spend more money on college education, I don't think that's so bad." [22] Faced with a MET shortfall, officials would have to allocate money from other state funds, cut other state programs, or, in a worst case scenario, raise taxes.

Turning to the economic assumptions underlying MET, one is faced with a different dilemma: present value analysis reveals that MET is a questionable investment for students at most state universities. Under the MET economic model, tuition increases are expected to average only 7.3 percent per year, the annual rate of return on the pooled resources in the fund is assumed to be 9.75 percent and Michigan economic conditions are generally assumed to continue along a stable path of growth.

The economist can judge the economic wisdom of MET as an investment using present value analysis. Economic theory and common sense suggests that if the cost of a project exceeds the discounted value of the future return then the project is questionable, at least on economic grounds.

Appendix 1 illustrates that MET cannot be justified on economic grounds at 13 of 15 major Michigan public universities: Central Michigan, Eastern Michigan, Ferris State, Grand Valley State, Lake Superior State, Michigan Tech, Northern Michigan, Oakland University, Saginaw Valley, U of M Dearborn, U of M Flint, Wayne State and Western Michigan. MET can be justified on economic grounds using present value analysis only at U of M-Ann Arbor and Michigan State University.