SEATTLE - The prospect of big tuition hikes at state universities has Washington lawmakers considering scaling back a popular program that lets parents buy tuition credits for their children years before they head off to college.
Under the state’s Guaranteed Education Tuition program, parents lock in tuition prices when they buy the credits. More than 120,000 families are enrolled.
But The Seattle Times says some legislators are worried that with rapidly rising tuition at Washington schools, the state one day might have to bail out the program. Several are considering bills to change the GET formula, possibly by creating a new program with lower benefits.
A number of other states that offer prepaid-tuition plans have closed their programs to new enrollments or changed the terms because tuition rates are rising so fast.
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Washington’s program is solvent, with $1.4 billion in assets. The money is invested in stocks, bonds and other investments, much like a pension fund.
State officials stress that families now holding GET units would not be shortchanged, even if there’s a shortfall or a new program is introduced. In the current program, the state guarantees it will cover the shortage if tuition increases outstrip the amount of money.
GET program director Betty Lockner said a shortfall is only theoretical: There could be good investment years and tuition increases could be moderate. And she says the proposed fixes might only make the problem worse.
But some legislators say they don’t want to risk a possible bailout.
On Tuesday, state Reps. Larry Seaquist, D-Bremerton, and Reuven Carlyle, D-Seattle, introduced a bill that would allow colleges and universities to set their own tuition rates over the next four years. It also would set up a committee to study whether a new version of the credits program should be created.
“The current benefits are a smokin’ hot deal, and anyone who can save for their kids’ college under this program has really benefited,” Carlyle said. However, it’s “unsustainable at its current level.”
Lockner said the GET funds were doing so well two years ago that the program had a 17 percent surplus. But the recession changed that.