Guaranteed Education Tuition.
The Guaranteed Education Tuition Program (GET) is Washington's 529 prepaid college tuition plan, which was established in 1998. As a prepaid tuition program, GET has a participant payout structure tied to in-state tuition rather than market-based investment returns. The GET account values are measured in units. An individual can purchase a GET unit at a set price with a state-backed guarantee that the unit will be worth the same amount of tuition in the future, regardless of the actual price of tuition. Historically, 100 GET units have equaled one year of resident undergraduate tuition and state-mandated fees at the state's highest-priced public university. A GET account can be used at nearly any public or private college in the country. A GET account holder can buy between one and 800 units per beneficiary, and the account benefits from tax-free growth and withdrawals.
The GET program is administered by the GET committee and Washington Student Achievement Council (WSAC) staff. The GET committee is comprised of the state treasurer, the director of the Office of Financial Management, the executive director of the WSAC, and two citizen members. The GET fund is managed by the Washington State Investment Board. The GET committee is responsible for setting the GET unit price annually. Each year, the state actuary provides an actuarial analysis to assist the committee in adopting the annual GET unit price. For the 2020-21 enrollment period, the committee adopted a unit price of $133.
The payout value of a GET unit represents 1/100th of the actual resident, undergraduate tuition and state-mandated fees at Washington's most expensive public university. The 2020-21 GET unit payout is $111.03 based on an annual tuition cost of $11,103.
As of June 30, 2020, the present value of future obligations to the GET program was $1.2 billion and the present value of the fund was $1.6 billion. The program was 131 percent funded as of June 30, 2020.
Tuition Policy.
In 2015 the Legislature adopted the College Affordability Act, which reduced resident undergraduate tuition in both the 2015-16 and 2016-17 academic years. For future years, tuition increases are limited to the tuition growth factor—the 14-year rolling average of Washington's median hourly wage. For the 2020-21 academic year, the tuition growth factor is 2.5 percent.
The GET committee must adopt a GET unit price of no more than 10 percent, including administrative fees, above the current unit payout value if:
For GET units purchased at the 2020-21 unit price, the GET Committee must provide additional units equivalent to the difference between the 2020-21 unit price and the 2020-21 unit payout value, after the unit payout value is adjusted 10 percent above the current price, including administrative fees.
The amended bill made the 10 percent calculation inclusive of administrative fees for both the GET unit price cap and the 2020-21 price adjustment.
(In support) The goal is to make college more affordable for Washington families who chose to save using the GET program. It is a well-funded program. This year, the cost of a year's worth of GET units went from $12,100 to $13,300, whereas the actual cost of tuition was $11,100. Tuition only increased $300. The state actuary cannot assume the Legislature will always keep the current tuition policy and has to use larger tuition assumptions than what tuition growth has actually been. This proposal would increase the number of GET units for those who purchased units last year. It results in about an $800 savings for someone who bought a year's worth of tuition.
(Opposed) None.