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Bill would reform Washington’s prepaid college tuition program

Post by Katie Schmidt on Feb. 16, 2011 at 4:15 pm |
February 16, 2011 4:15 pm

With the future of higher education funding uncertain, lawmakers are looking to change the state’s Guaranteed Education Tuition Program, saying that it could lead to budget problems down the road.

Senate Majority Leader Lisa Brown, D-Spokane, and Minority Leader Mike Hewitt, R-Walla Walla, have teamed up to sponsor Senate Bill 5749, which would change the program under which Washington parents can buy credits toward future college tuition for their children, but the program’s administrators say the proposed reforms could make it a less attractive investment.

Though the program is not in danger of running out of money at the moment, Brown said she was sponsoring the bill because nobody knows how much tuition will cost 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,” Brown said.

The current GET program 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 would limit the amount that units can appreciate to an average of increases at all state colleges and universities, weighted based on the number of students going there, allow limits on the number of units people could buy and reduce the amount students who do not use their units could be refunded.

According to a 2009 report by the State Actuary, the risk of state money having to be used to bail out GET over the next fifty years is small, though under a worst case scenario—if people stopped buying into the program, for instance—the necessary state contribution could be significant.

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 that legislators are considering changes, she said, is because the GET model relies on predictable tuition increases, which would be out of the state’s hands under proposals to give state universities tuition-setting authority.

She said it would be better for the committee that oversees GET to come up with reforms to suit a new higher education funding model rather than having changes handed down from the Legislature.

“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 for the entire education system and explain what that average meant to parents.

Sen. Rodney Tom, the chairman of the Higher Education and Workforce Development Committee, which had a hearing on the bill today, said he was not completely satisfied with the existing bill and he planned to propose some changes over the next two days.

To move on, the bill will have to pass out of committee before Monday, the deadline for committees to vote on policy bills in their houses of origin.

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