In Our View: GET a Move On

About four years ago, hardly anyone envisioned America’s worst economic crisis in seven decades. On Dec. 26, 2006, The Columbian editorialized about the great benefits of the Guaranteed Education Tuition program, which allows parents to save for college and guard against inflation by locking in low tuition rates. Back then, tuition rates were increasing about 7 percent a year, and the Dow was chugging toward an all-time high (14,164) that would be reached about 10 months after that editorial.

Then came the recession.

We still think GET is a great deal for parents. Boy, is it ever. Tuition costs are soaring, in fact by double digits in each of the past two years, with more such increases expected. But because of that economic crisis, GET is no longer a good deal for Washington state. As The Seattle Times reported recently, the fund ($1.4 billion in investments) is currently solvent, and all tuition credits already purchased are guaranteed. But the long-term health of GET is not encouraging, according to the Times: “If the program’s 120,000 families tried to cash in now, the state would be able to pay out only 86 percent of benefits, leaving a $255 million shortfall.”

State must act

This shortfall must not be allowed. The last thing our state needs is a new financial burden — now, years down the road or ever. Legislators are working on tweaking GET for future enrollees, perhaps closing out the current program, keeping promises made to those already enrolled and starting a GET II.

Our state is not alone in this dilemma, and in some states the problem is more severe. In November, Tennessee became the eighth state to end its prepaid tuition program. The Wall Street Journal reports that 11 states still have such programs. Washington is one of five states where the payments are guaranteed by state law.

Parents should act

Parents, if you’re interested in cutting the soaring costs of college, there are two valuable lessons in these latest developments in the world of prepaid tuition. First, if you’re already participating in the GET program, your investment is making even more sense now. The state is obligated to keep its end of the deal, and you should consider increasing your investment.

Second, if you’re not a GET participant, procrastinating will be costly if the Legislature modifies the plan. All the more reason to visit http://get.wa.gov and investigate the advantages. As noted on the website: “The value of your account is guaranteed by the state to keep pace with resident undergraduate tuition and state-mandated fees at the most expensive Washington public university. The state picks the investments and assumes all the investment risks.”

Other facts to keep in mind:

The GET enrollment period for new accounts or to add a custom monthly plan runs through March 31. Minimum investment to open an account is the unit price, which currently is $117.

You do not have to designate a college when you enroll. In fact, GET savings can be spent at most public or private colleges, universities or technical schools in the nation and some in other countries.

GET accounts can be used not only for tuition but also for room and board, books and other qualified expenses.

Although participants typically are parents, you can open a GET account for anyone, including a grandchild or even yourself.

You can even use GET units as baby shower gifts. List yourself as the student beneficiary until the baby is born, then change the beneficiary after the baby is born and obtains a Social Security number.

We see two levels of urgency on this issue: among legislators to prevent any shortfall, and among parents to register for GET before changes are made.