Parents who are saving money to pay for their children’s college are urged to consider the state’s Guaranteed Education Tuition, or GET, program. The new enrollment period opened Tuesday.
Granted, some parents might be led to ask a rather challenging question: Why are today’s parents charged $163 for one GET unit when the cost last year was $117, and it was only $61 in 2005 and a mere $35 in 1998?
The concern expressed in that inquiry about the soaring costs of higher education is understandable. But here’s a more valid question, based not on the past but on the future, which is where affected parents should focus: Would you rather pay $150,000 for four years of tuition starting in 2029 (projected for a child born today), or pay significantly less by saving regularly through the GET program?
Yes, that number is staggeringly high, but here’s another way of looking at this issue: By participating in the GET program and saving regularly, parents (or grandparents, as is the case in 11 percent of current accounts) can accomplish two financial goals. They can lower the cost of tuition, and lessen the pain by spreading it out over several years.
To get started, or to change your GET savings plan, visit http://www.get.wa.gov.
Washington is among the leaders of states that provide prepaid tuition programs. At one time, 22 states offered tuition savings plans, but nine have been suspended or closed. Only five of the 13 remaining plans (including our state’s program) are guaranteed by the state, meaning the state government would be forced to bail out the program if it did not pay for itself. The risk of that occurring appears extremely low, even during the lingering economic crisis. A study ordered by state legislators concluded that Washington’s prepaid tuition program “is viewed by other states as a leader in efficiency, program management, and increased participation.” And a state actuary report has said there is less than a 1 percent chance of the program failing to meets its obligations over the next 50 years.
Wise parents are jumping on the bandwagon. More than 135,000 accounts have been opened during the 13-year history of the program, and last year there were 15,284 new accounts, the second-highest total ever.
Here’s how it works: Units are purchased at a rate determined each year by the GET Committee, chaired by the executive director of the Higher Education Coordinating Board. One hundred units constitute a full year’s tuition (excluding room and board) at nearly any public or private college, university or vocation school in the country. GET accounts have been used in every state and five foreign countries.
Yes, it’s discouraging that the unit price today ($163) is more than quadruple the price of 13 years ago ($35). But remember, college tuition costs have increased by double-digit percentages for the past few years, and that is expected to continue for several more years. Why? Because state funding of higher education has decreased by as much as 37 percent in each of the past three years. Universities are forced to make up for that loss of revenue by increasing the cost to consume their products: knowledge, degrees, the short-term rewards of good jobs and the long-term rewards of lucrative careers.
Even if you don’t ultimately save 400 units for a full four years’ tuition, the savings can significantly reduce the sticker shock that parents face after their kids graduate from college. Start early (it takes four to five years to realize a gain), and show your children (or grandchildren) that you’re willing to do your part in securing their higher education.
Then, when you demand good grades from your kids, you’ve got plenty of clout to back it up.