Sep 28, 2015 Big Changes to Washington’s GET Program
Earlier this month, changes were made to the Guaranteed Education Tuition (GET) program. The changes were in response to the recent reduction in tuition for Washington’s public colleges and universities. Tuition will be reduced at UW & WSU by 15% over the next two academic years.
In addition, beginning in 2017-18, resident undergraduate tuition will not be allowed to grow by more than the state’s average annual growth rate in the median hourly wage as determined by the Federal Bureau of Labor Statistics.
These changes are important because GET’s payouts are based on tuition at UW & WSU. The drop in tuition has reduced the payout value for GET units to $117.82, meaning those who remain in the program may not recover all of their initial purchase price. Should a student decide to attend school at a private or out-of-state school when they reach college age, GET units may not provide the purchasing power once anticipated.
What does this mean for you?
In response, the GET program has provided the following three options for your existing units:
- The current payout value of the GET program will now be $117.82 per unit. If you choose to remain in the program, you will receive this payout value.
- If you wish to move your GET funds into a different 529 plans, including a 529 savings plan, the GET program will waive all state program refund fees and the two-year hold requirement.
- If you wish to cash out your GET funds, you will receive a refund of your contributions or the payout value, whichever is greater. Be aware that this option may have tax consequences. In addition to the changes above, customers who purchased units between 5/1/2011 and 6/30/2015 will be due a refund of the amortization fee originally paid when units were purchased. Moving forward, this amortization fee will not be charged to new units purchased. You will not need to take any action to redeem your refund. Customers should expect to receive these refunds by December.
The deadline to exercise options 2 or 3 is December 1, 2016, however the Washington State Institute for Public Policy is currently conducting a study to look at growth factors moving forward. This report will be available by December 1st, 2015 so you may wish to wait until this deadline in case there are more favorable options presented.
The table below gives the refund amount per unit you should expect:
Year Unit Purchased
|Refund Amount Per Unit|
|5/1/11 – 6/30/12||
|7/1/12 – 6/30/13||$19.73|
|7/1/13 – 6/30/14||$20.82|
|7/1/14 – 6/30/15||
We recommend waiting to take any action until after the December 1st, 2015 meeting, in the event more favorable options are presented. We encourage you to review your individual situation and meet with your financial advisor if you’d like to discuss your options.
Here are the links to the GET Refund Cancellation Policy and Refund Form.
Please note: prior to investing in a 529 plan investors should consider whether the investor’s or designated beneficiaries home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.
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