An important funding mechanism used in paying for the future cost of college tuition is soon to emerge from a state of two years in hibernation.
The GET program — acronym meaning guaranteed education tuition — is poised to start accepting contributions on Nov. 1. It will do so with a renewed enthusiasm buoyed by lower rates and a new program.
“We did refer to it as a unit purchase and enrollment delay,” GET’s senior associate director Luke Minor said.
There was a two-year suspension for new enrollment that was brought on by the passage of legislation called the College Affordability Program. That rolled back the state’s tuition levels two years ago.
Two years ago the state legislature authorized state colleges to cut tuition by varied amounts. Both WSU and the University of Washington cut tuition by 15 percent over two years. Eastern Washington trimmed theirs by 20 percent over two academic years.
As tuition rates were rolled back, the GET participants could lose money, hence the program was suspended until a fix could be crafted.
A typical GET account might have 100 units, or a year’s worth of tuition, Minor explained. One unit pays out at 1/100th of whatever that year’s tuition is. Before the rollbacks occurred, each unit was valued at $117.82.
“The legislature said keep those accounts at $117.82 and after that make adjustments,” Minor said. The payout was set lower to $103.86, but to “Keep customers whole,” the difference was backfilled with the issuance of additional GET units.
If an account had 100 units and decreased about 13 percent in value it gained that much in new units.
The reduction in tuition was considered a one-time thing and quite unprecedented at the time. “Few, if any other states have seen such a policy where you are actually reversing course on tuition,” Minor said.
Rollbacks of college tuition are now likely a thing of the past with increases already in place. The 2017 increases were just over 2 percent, Minor said. Rates will go up similarly in 2018 and beyond that the number will be tied to the biennial budget.
“Their intent is to stay on this path but we won’t know what that is until we arrive,” Minor said. “It was more like a correction.” Tuition was growing at a very fast rate in the early 2000s and in the recession it went into double-digit increases year-after-year.
The initial steps at the state level were to freeze college costs for a couple of years, followed by the rollback in rates once it was realized the numbers had been growing at an unreasonable rate.
Minor emphasizes it is never too early to start saving for college for children or even grandkids. His message: Start early, save what you can and get the family involved.
The cost of college down the road for a child can be intimidating, Minor said. It’s not about having the whole pot of money right away but rather chip away at it and slowly build the account.
“An anecdote we like to use is if you set aside $5 a day for 10 years (that’s) $18,000 and that’s before any substantial growth in the account,” Minor said.
GET has just over $2 billion in assets for 95,000 accounts with $1 billion already paid out to 50,000 students since its inception in 1998. “We’re really seeing the tangible impact it is making for families,” Minor said.
Along with those lower unit prices, another change that will happen in 2018 is the start of a new college saving plan, which will offer potentially bigger returns — but also risks — in a 529 college saving prepaid plan. Established in 1996, such programs allow families to set aside money tax-free for college tuition.
Existing GET customers will have the option to roll over units into this new program. “We anticipate a lot of participation by both current and new customers,” Minor said.
Paul Delaney can be reached at pdelaney@cheneyfreepress.com.
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