A Washington State Actuary report this week concluded that, contrary to the fears of Sen. Rodney Tom (D-48, Medina) and his senate Republican allies during this year's legislative session, the Guaranteed Education Tuition (GET) Program is in robust financial shape. Earlier this year, Tom and the Senate GOP wanted to cut the GET program altogether, because the program had $631 million in unfunded liability (supposing all GET participants decided to withdraw their college funds at once).
It turns out the GET program is not as unstable as Tom and the GOP, in Paul Ryan austerity mode this year, led the public to believe.
The GET program allows parents to invest in their child's college educations early by making a down payment (say, 10 percent of the total cost) based on current tuition rates—and then, 18 years later, regardless of how much tuition has increased since their original payment, getting a check worth the same percentage of tuition that they prepaid at earlier cost. Though the rates are based on our state university's tuition, the money can be used to pay for any university across the U.S.
The report shows that the GET program's funded liability has increased from 81 percent on June 30, 2012 to 94 percent as of June 30 of this year. Moreover, the program's risk of insolvency is down from one percent to just 0.1 percent in the next 50 years.
So it turns out the GET program is not as unstable as Tom and the GOP, in Paul Ryan austerity mode this year, led the public to believe.
Moreover, had the program been pulled as Tom and Republicans wanted, the state would have had to pay an estimated $1.67 billion over 11 years after running out of money in 2025, as there would have been no new influx of cash for the fund. Keeping the program, however, doesn't cost the state at all; the difference in raised tuition rates is paid for by the continually inflowing money.
Senator David Frockt (D-46, Seattle), an advocate of saving the GET Program during the legislative session, says the bottom line is that killing the program "would have been a greater financial burden on the state" than keeping it.
He said that, to maintain long-term solvency, the state has to make sure tuition increases are, if anything, modest, and let families know that this program is "safe and sound."
According to the GET website: Since 1998, when it the program was first set up, over 152,000 GET accounts have been opened and over 30,000 students have already used their accounts to attend colleges, universities, and technical schools nationwide.