Washington 529 Plan Review
Morgan Black, MBA, CDFA, Staff Contributor
The Guaranteed Education Tuition Program is Washington State-sponsored 529 prepaid college tuition plan. It allows the Washington state parents to start saving for their child's education at birth. With GET, you can prepay for your child's college tuition today and can use it at nearly any public or private college in the country. The education is guaranteed. In this post we will explore if signing up for the Washington GET plan worth it.
How Does GET Work?
As a GET plan subscriber, you can buy units at a price. The number of units corresponds to the benefits you can get. While the unit price can change every year, the unit ratio will stay the same. Below are some examples of how units work:
- 1 GET Unit = 1 TextBook
- GET Units = Books + Stationary for the semester.
- 15 GET Units = Tuition at a community college for 1 quarter
Benefits of GET
- State guarantee - Your child's college education is guaranteed by the Washington state. If you buy 100 GET units today, you'll have one year of public college tuition when your child is ready for college.
- Choice of colleges nationwide - You can use your GET account at nearly any public or private college in the country.
- Tax-free savings and withdrawals - The money you put into your GET account will grow tax-free. The withdrawn will be tax-free as long as you use it for qualified higher education expenses.
- Flexibility and control - You can use your account for tuition, room and board, books, or other qualified higher education expenses. If for some reason your child decided not to attend a college or receives a scholarship, you can transfer your account to another family member or request a refund.
- Easy ways to save - You can set up a monthly payment plan or you can contribute at any time you feel is the right time.
Either the account owner or student should be a Washington resident at the time of enrollment.
How to Enroll
You can enroll by going to the GET website.
Criticism for GET
- A large number of critics believe that that GET is a state-sponsored Ponzi scheme that relies on continuing to recruiter new subscribers to the plan to pay for college tuition at the time of redemption. Others feel that there are better ways to save for college than the GET plan.
- GET requires you to make the payment upfront. If you need to pay the GET plan over years, you are required to finance the plan at a very high-interest rate.
- GET also has a history of over-collecting from parents and then refunding the money years later. However, since most parents finance the plan they never get the paid interest back.
- GET guarantees full tuition only at in-state schools. If your child decides to attend a private college or an out-of-state university, then GET will pay only a portion of the tuition that is equivalent to the in-state tuition.
- If the Washington States goes bankrupt then they might refuse to honor GET.
- If you withdraw funds, the money you will get might be lesser in value than inflation-adjusted.
Co-parents and College Savings Plan
College saving plans become even more critical if parents of a future Washington college student are divorced or separated.
It covers full tuition for a 4-year college including:
- University of Washington
- Western Washington University
- Eastern Washington University
- Central Washington University
- Washington State University
- Bellevue College
- Evergreen College
- Other public colleges and universities
It covers partial tuition at:
- Seattle University
- Gonzaga University
- Other private colleges and universities
Regardless, it provides a great vehicle for the Washington state co-parents to start saving for their children's college education. Just in case the child decides not to attend college, both parents can get their share of the money back. They can also start a GET plan for themselves if they wish to go back to school. One of the major benefits of a GET plan is that they don't need to hire a financial advisor to estimate the money they need to fund their child's education. The GET sets a price for them. However, if parents think that their child might attent an Ivy League school or another out of state school then exploring a different plan might be worth the effort.
Since co-parents have separate finances and only one person can start a GET plan, both parents can start one separately for the same child, and fund half of the credits. This way, if the child decides not to attend college or they need to withdraw funds for some other reason, or assign a different beneficiary for their portion, they can do so easily. Alternately, one parent can fund the entire plan and the other one can reimburse them for their half.
Comparison With Other 529 Plans
|| 4 Yr. Tuition
|Full In-state Tuition
|Full Out-of-state Tuition
|State Tax Exemption
|Federal Tax Exemption
|Student Loan Repayment Option
What is a 529 College Saving Plan?
This post is neither financial, health, legal, or personal advice nor a substitute for the advice offered by a professional. These are serious matters, and the help of a professional is recommended as it can impact your future.