State Senate to debate future of prepaid tuition program
After the leadership of the state Senate appeared to be shifting away from the Democrats and toward a mostly Republican coalition led by Democrat Sen. Rodney Tom, they turned 180 degrees and started talking instead about closing the Guaranteed Education Tuition program, one of the few ways the Legislature helps middle class families send their kids to college.
Tom, who is chair of the legislative GET advisory committee, has been talking about closing the GET program for years. The former chair of the Senate Higher Education Committee, who has said he has his own kids’ college money in the program, appears to be using some of his new leadership power to promote that idea to a bigger audience.
Tom told journalists gathered at The Associated Press Legislative Preview last week that it was time for the state to get out of the prepaid tuition business, and this week the advisory committee is expected to distribute its report calling for closing the GET program to all future participants.
When asked Wednesday how popular was the idea of closing the GET program while honoring the promises made to all current investors, Tom said, “Nobody in Olympia likes to shut down a program.”
He is haunted, however, by a projected program deficit of about $631 million, which is the estimated shortfall the program would face if every participant — including babies and kindergarten students — decided to go to college this year and use their GET savings to pay their tuition.
“We just don’t want to make that hole any bigger,” he said.
Tom adds, however, that he has more than just a problem with the deficit. He also worries about the way the GET program controls the legislature’s actions when it comes to college tuition.
“The GET is the 800-pound gorilla and the tail is wagging the dog,” he said.
Also in the GET advisory committee report is a recommendation that the Legislature change its differential tuition plans to only allow colleges to charge more for tuition for certain programs as long as their higher tuition does not go above the University of Washington’s highest rate, Tom said.
GET Director Betty Lochner said Wednesday nothing has changed concerning the solvency of the GET program. The state actuary has said repeatedly that the chance of the GET program running out of money and not being able to meet its obligations to future college students is about 1 percent.
Closing the program or stopping new participants from joining GET will cost the state an estimated $1.67 billion over 11 years after the program runs out of cash in 2025 because no new money would be coming in, Lochner explained. Keeping it open won’t cost the state a penny.
“I know there are strong sentiments about long-term liability for the GET program,” Lochner acknowledged, but she also worries about what the state will do for the middle class parents who benefit most from the GET program.
Parents and grandparents who use Washington’s program to save for college are guaranteed that they will have that money to pay for college when their kids graduate from high school.
“The more expensive tuition gets, the more important this program is,” she added. “That’s the piece I wish they would talk about.”
Sen. Andy Hill, R-Redmond, who chairs the powerful Senate Ways and Means committee, said he supports eliminating the GET program.
“It’s a job that our government doesn’t need to do,” said Hill, noting that similar — though less generous — savings programs are widely available to consumers in the private sector.
Rep. Gary Alexander, R-Olympia, said he opposes the advisory committee’s recommendation to eliminate the program.
He said that families relying on GET to save for college would be left with fewer options to do so in its absence.
“It would have to be through basic financial aid or the other traditional funding sources that have been there in the past,” he said.
This year’s price for one Guaranteed Education Tuition unit is $172, which translates into $17,200 for a year of tuition and state mandated fees at the University of Washington or Washington State University. That doesn’t include room and board.
Two years ago, one tuition unit cost $117, which at $11,700 for 100 units would be slightly less than this year’s tuition at UW and WSU.
Tuition has nearly doubled at the state’s six, four-year colleges and universities over the past five years. While financial aid for students from lower income families has increased, most middle class students are depending on student loans to make up the difference.
Tom said it’s unclear exactly who the GET program helps.
“The best way to help the middle class is to have a great system for everyone,” he added. To him, that means making it possible for kids to get good paying technology and engineering jobs after earning degrees from Washington universities.
Associated Press writer Jonathan Kaminsky contributed to this story from Olympia.
Our new comment system is not supported in IE 7. Please upgrade your browser here.