Higher education is facing a funding crisis in the United States today. In Washington state, the recession and state budget cuts have dealt a blow to higher education funding. In light of severe funding challenges, our state should be doing everything it can to preserve – not eliminate – programs that enable families to afford college.
The Guaranteed Education Tuition (GET) Program, Washington’s prepaid college tuition savings plan, is a critical savings tool for middle-class families. Purchasing GET accounts – which are guaranteed to keep pace with tuition – allows Washington residents the opportunity to start saving early for the costs of their children’s higher education.
Currently 86 percent of GET students use their units to attend higher education institutions in our state. Washington’s GET program is the second-largest prepaid tuition plan in the country, with participants in every county in the state.
As the state’s share of higher education has decreased from 70 to 30 percent today, funding the cost college of has fallen on the backs of students and their families in the form of dramatic tuition increases. With tuition and fees nearly doubling between 2008 and 2012, Washington’s public higher education institutions are rapidly becoming out of reach for some families and students.
The Legislature is right to evaluate how recent tuition increases will impact the stability of the GET program. Double-digit tuition increases have caused GET’s unit price to increase. The current $172 unit price has resulted in fewer new accounts being opened and fewer units being purchased by existing accounts.
While some legislators are discussing what has been coined as the “unfunded liability” of the program, it is important to realize that the risks of liability are greatest if the program is closed to new enrollments today.
According to the Washington state actuary, if GET is continued as it is currently structured, there is only a 0.06 percent chance that the state would ever make a contribution to the program. Even if tuition continues to increase by double-digit increments as is the current trend, the program would reach 100 percent funded status over the next 20 years based on current funding structure.
I’m a lawyer, not an economist, but the risk analysis seems pretty sound – especially when the opportunity costs associated with the program are significant. This risk to the program would further decrease if the Legislature were to make much-needed investments in higher education and increase the state’s share of funding to a 40-60 percent split between state support and tuition.
This funding scenario would not only decrease the risk of the program needing a general fund contribution to 0.02 percent, but would be a significant step toward educating more Washingtonians.
As a state employee, I have already thought about investing in the GET program when my husband and I start a family. We are 30-somethings living with our own law school loans and stagnant public-employee salaries. We consider the GET program an important option to ensure that our children can one day afford the same opportunity to attend our state’s public higher education institutions.
While the program is not a panacea, it is important tool for risk-averse families hoping to invest in their children’s college future today.
While the Legislature should consider reforms, closing the GET program would mean eliminating the state’s only college savings tool. That’s not doing right by Washington families. Instead of closing the program, it is time for the state to make meaningful investments to ensure that public higher education remains accessible to all Washingtonians.