GET Costs To Increase
SEATTLE (AP) — Despite speculation to the contrary, the price for Washington’s prepaid tuition program will be going up again this fall, according to officials with the Guaranteed Education Tuition program.
The committee that sets the price for GET units won’t meet until mid-August, but agency spokeswoman Susan Martensen told The Associated Press a price increase is all but certain.
“We have every indication from the state actuary that next year’s unit price will be higher,” she said. “It looks like we won’t see a large tuition jump next year as we have seen in the past few years, but tuition both next year and over the long term is still projected to rise.”
State Actuary Matt Smith said on Thursday that he can’t predict what the GET committee will decide in August, but agreed that all indications are that an increase in the unit price is likely this fall.
Since the program started in 1998, unit prices have never gone down; they’ve always gone up.
Meanwhile, Smith says a long-term plan to reform the GET program and improve its financial picture seems to be working.
Washington’s prepaid tuition program is a state-run 529 college savings plan with a twist.
Investors are guaranteed that no matter what happens to the stock market or state tuition, they will be able to pay for an academic year of tuition and mandatory fees at the state’s most expensive college or university with 100 GET units. Tuition and fees at less expensive schools cost fewer units and housing is extra.
People who already have GET accounts for their children or others will have one more month to buy GET units at this year’s price of $172, which translates into $17,200 for a year of tuition and state mandated fees at the University of Washington or Washington State University.
Two years ago, one tuition unit cost $117, which at $11,700 for 100 units would be slightly less than this year’s tuition and fees at UW and WSU.
Those who don’t have GET accounts, will have until midnight Friday to join the program if they want to buy units at this year’s price. The exception to this rule is for accounts opened for new babies at any time. GET units can be used nationwide at colleges, universities and technical schools.
When the economy is strong and the stock market is growing steadily, college savings in Washington’s GET program isn’t the most lucrative investment. People buy GET units for the guarantee.
But when tuition is going up rapidly and the stock market is tanking — like in recent years — GET units have shown a higher return.
The Legislature has yet to finalize a state budget, so students, parents and the GET committee do not know how much the state’s six, four-year public colleges and universities will be charging this fall.
Washington State University has already decided, however, to increase tuition by no more than 2 percent. Lawmakers have included a variety of tuition plans in their budget proposals, including up to 5 percent increases, but the universities have some freedom to set their own tuition rates despite what the Legislature decides.
Tuition has nearly doubled at the state’s four-year colleges and universities over the past five years. These increases made up for some state cuts for higher education.
A March report from the State Investment Board shows GET assets have grown steadily in the past year and a half, despite a slowdown in units purchased over the past few years.
The most recent state report from the state actuary, which came out in June 2012, said the GET program was underfunded by more than $500 million. That means if every child with GET units, including preschoolers, were to go to college this fall, the state would have to find money to make up for that shortfall.
The state actuary said those numbers have improved slightly during the past fiscal year, thanks mostly to strong investment returns, which have improved by more than 14 percent so far this fiscal year.
“But we don’t get too excited about one year’s worth of returns,” Smith added.
The third piece of data he is waiting for is whether people are enrolling in the program at a steady rate. Those numbers will be available soon.
Smith said a 30-year reform plan for the GET program seems to be working.
Does that mean GET prices won’t go up in the fall? No, says Smith. It means the program got a year of good news after a couple years of bad news.
“There are plenty of underlying forces that imply (the unit price) will be going up,” Smith said.
Copyright 2013 The Associated Press.