April 7, 2020
There are more than 66 thousand accounts in the state college tuition savings fund called the “GET” program
There’s more than $1.4 billion in its coffers, with that cash tied to investments made by the state.
But given the nation’s economic outlook due to COVID-19, should parents worry about the program’s solvency?
We turned to Luke Minor, director of the WA529 program, which administers these college savings plans.
“What would happen if the program were ever underfunded is the state would have to step in and make good on the gap between what we’d have on hand to pay customers and what the future payout would be,” says Minor.
He says the GET program is guaranteed by the legislature.
Families pay a price by unit – right now, that’s $121. 100 units equals one year of tuition at a Washington college or university.
“You’re purchasing something in advance, you know. You know how much of that they are going to get on the other end,” says Minor.
However, during the last economic downturn there was talk about ending the program. At one point, the program was funded at just 80%.
“The recession had a huge impact on the economy and GET was no exception,” says Minor. “There was a period of time where the program was underfunded.”
But the economy did bounce back. The legislature was also able to curb annual tuition raises.
“We still don’t know what the future of tuition will look like. There is a tuition policy in place that keeps it at relatively low levels, and that’s good overall for the program because it helps us maintain our financial health,” says Minor.
Minor says the long term projected annual return on the fund is 5 percent. It over-performed at 7.2 percent over the last ten years. And in 2019 there was a return of 19 percent.
The program is now funded at 130%.
Minor believes, at this point, there’s enough money to survive troubling financial times. But his work continues.
“We need to responsibly manage the program, we need to be fiscally responsible, we need to ensure that the state’s not going to have to step in and cover that guarantee,” says Minor.