With higher education tuition rising rapidly in the state, some lawmakers want to change the state's Guaranteed Education Tuition college-savings program to head off a financial shortfall in the future.
A bipartisan bill to reform GET, the state program that lets parents buy credits toward future college tuition at today’s prices, passed out of committee Friday, but the program’s administrators worried that the proposed changes could make it confusing and hard to oversee.
Though GET is not in danger of running out of money at the moment, Senate Majority Leader Lisa Brown said she was sponsoring the measure, Senate Bill 5749, because nobody knows how much tuition will escalate at state universities in a few years.
“I don’t think we have a very clear path forward for higher education funding at this point,” said Brown, a Spokane Democrat. “Let’s not inadvertently create a long-term liability that a Legislature in the future will have to deal with.”
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Senate Minority Leader Mike Hewitt, a Walla Walla Republican and co-sponsor of the bill, agreed, saying the state could be on the hook for expensive cost overruns if GET is not changed.
The current GET program, which was established in 1998, allows parents to buy “units” that they can eventually use to pay for college. Buying 100 units guarantees a person one year of tuition and fees at the most expensive state university.
The proposed changes to the program, which would only affect units purchased after July 31, would limit the amount that units can appreciate to an average of tuition increases at all state colleges and universities, weighted based on the number of undergraduate, resident students at each school. The bill would also allow limits on the number of units people could buy and put more restrictions on the amount students who do not use their units could be refunded.
The reforms would mean that the value of the units in the new GET program would not appreciate as quickly because community colleges, which have high enrollments and low tuition, would heavily influence the weighted average. In 2010, the community college system had about 160,000 students, while the University of Washington had about 27,000 undergraduates.
According to a 2009 report by the State Actuary, the risk that the state would have to bail out the current GET program over the next 50 years is small, though under a worst-case scenario – if people stopped buying into the program, for instance – the state could have to contribute billions of dollars over a 50-year period.
GET Director Betty Lochner said the program is based on a strong model that would work regardless of the amount that tuition costs because the GET committee can always change the price of units to account for higher tuition rates.
The reason the program might need to change, she said, is because the GET model relies on predictable tuition increases, which would be out of the state’s hands under proposals in the Legislature to let state universities set tuition on their own.
Lochner said she had some concerns about the approach Brown’s bill would take to those changes, though. She said the new rules would make it difficult to explain to parents what GET credits are worth because it would be unclear how many a person would need to buy to cover a year of school.
“We’re worried that we would end up with something really expensive and hard to administer and hard for families to understand,” Lochner said.
She and Don Bennett, executive director of the Higher Education Coordinating Board, said they would prefer a tiered system that allowed parents to buy tuition credits at the community college level or a university level instead of trying to calculate an average appreciation value for the entire education system.
At a hearing on the measure Wednesday, Olivia Aikala, a student at the University of Washington Tacoma and a GET beneficiary, also said she disliked parts of the bill, including those that would prevent new GET credits from covering services and activities fees and require students to use all of their units within six years.
Lochner said, though, that there will still be plenty of time to amend the bill, which must pass the Senate Ways and Means Committee, the Rules Committee and the Senate floor before going through the same process in the House.
“I think it’s still pretty early in the process and there’ll still be a lot of changes,” she said.