SEATTLE — In the first month since Washington’s prepaid tuition program offered refunds to anyone invested, only 3,400 out of 130,000 college savers have asked for their money back.
Program Director Betty Lochner said up to 16,000 refund requests were expected, but families with money in the Guaranteed Education Tuition program will have a year to decide.
The $27 million in refund requests so far include some partial refunds and some refund requests that had nothing to do with the changes in the program, she said. The program has a total of $2.7 billion invested at this time.
In the meantime, the program is automatically refunding some fees paid by people who bought tuition credits, known as GET units, during the past four years. Those refund checks of about $20 per unit purchased during that time will be mailed by November, Lochner said.
The committee that manages the GET program has decided to close the program to new investments for a period of up to two years. The committee can decide at any time to reverse that decision, but Lochner does not expect that to happen until after the Legislature meets again next year.
They are still accepting payments on installment plans set up before the program was closed to new customers, processing unit payouts to colleges, investing the money already in the system and getting lots of phone calls from people with questions about their accounts and the refund offer.
Nearly 11,000 people have called the GET office since a letter explaining the changes was mailed Sept. 2. Nearly 2,000 emailed their questions. Lochner said the inquiries have been used to improve the program’s online question and answer page.
“People just really wanted to hear from a person,” she said. “We’re finding that most people just want to know what the options are and they’re going to just wait and see.”
Since everyone’s situation is different, responses to the refund offer will need to be customized. Refunds are also available to people who are paying on custom monthly plans. Lochner advises people to consult with their own financial planner if they are unsure what to do.
“You have to think about how old your child was when you opened the account and how old they will be when they use it,” Lochner said.
She noted that tuition will likely start going up again in Washington state, although not for the next few years. Tuition has been going up an average of 6 percent nationwide, Lochner said.
The committee and the program staff also are exploring options for the future, as the Legislature requested.
It’s possible the program will reopen for new saving plans sometime in the next few years. It’s also possible the state will decide to open a new kind of 529 college savings plan.
The program remains financially strong, despite the refunds, as it is funded at 140 percent of the dollars needed to pay out every GET unit as if every child in the program is going to college this year. A few years ago, when tuition was rising rapidly in Washington state, the GET program was only funded at 86 percent.
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