I just received the annual report on the GET Program. It is full of information about how financially stable the fund is, and that income is 106 percent of payouts! That sounds great! Unless you’re one of those receiving payouts.
The purchase and payout amounts for GET are based on tuition rates. Purchase price equals the current payout price plus about a 30 percent premium to pay for the program. A few years ago, tuition was skyrocketing, and that premium was always lower than the final payout at maturity. In order to keep it from getting beyond the ability of many families, tuition was frozen three years ago. While that is good overall for students and families seeking higher education, it seriously screwed everyone who put money aside for college in the GET program.
Next year, the payout is expected to be the same as this year – $117.82 per credit (one credit is 1 percent of tuition and fees). Those who bought GET credits to be used for next year (initial maturity) paid $163 for them. That’s a loss of more than a quarter of the money these families were counting on for their children to go to college. It would have been better for these families to bury their money in a jar in the back yard, but at least the state is making money on it.