Editorial: The case for closing GET, state’s prepaid tuition program
A call by some lawmakers to close the Guaranteed Education Tuition program is worth heeding.
Seattle Times Editorial
THE state’s Guaranteed Education Tuition program is a special deal for people with the foresight and money to plan for college. Given wildly escalating tuition in recent years, those credits are like gold.
But a legislative advisory committee that examined the unsustainable program makes a compelling case for closing it.
First, here is how GET works: Parents saving for college can buy tuition units (100 units cover a year’s tuition) and then redeem them at one of Washington’s public higher-education institutions in the future — without having to pay more because of tuition increases. A tuition unit could be purchased in 1998 for $35 and today for $172. The investment yields a handsome return, especially because tuition has soared — more than double in the past five years — as state universities have struggled to make up for deep state cuts.
State lawmakers should be seriously concerned about a projected $631 million future shortfall in GET. The program’s $2.1 billion fund was set up to be self-supporting, as long as new investors continue to enroll. But as the price of new GET units has risen, new investors are buying fewer of them.
The challenge becomes more severe if the Legislature continues to underfund higher education, forcing a continuation of double-digit tuition increases.
To best help students and their families, lawmakers must slow down tuition growth and return state support to the days when half of the funding for in-state undergraduate tuition came from the state and half from students. Currently, tuition accounts for two-thirds of the cost with the state picking up the remainder.
GET’s problems also negatively affect flexibility in tuition policy. Lawmakers gave Washington’s four-year universities authority to set different tuition rates for different majors as a way of paying for more slots in high-demand fields of study, such as engineering. But lawmakers rescinded the authority over concerns about its effect on the college-savings program.
Almost every state offers some kind of a college-savings or prepaid tuition plan. But Washington’s GET plan is too generous. Now Washington is one of just four states that backs the plans with the full faith and credit of the state. Some states have shut down their prepaid tuition plans.
Closing GET to new enrollees would cause a $1.7 billion hit to the state treasury over an 11-year period. That’s because without new investors GET’s current fund balance is expected to be depleted by 2025. The state would then have to step in financially.
The state has a contractual obligation to the holders of the 120,000 GET accounts. Any changes, including closing the program, should not affect those families. Those promises must be kept.
Middle-class families have other marketplace options to save for college. The state’s priorities should be to stop the bleeding in higher-education funding and protect low-income college students. Currently, the Legislature has accomplished this by pairing tuition hikes with commensurate increases in the State Need Grant and other state support. That’s the right priority.
Lawmakers ought to look to Senate Majority Leader Rodney Tom, D-Medina, who chaired the GET legislative committee and calls for a long-term phaseout that protects current enrollees. He plans to introduce legislation to phase out GET.
More meat needs to be added to the bones of Tom’s plan but it leads the state in the right direction.