David Goldstein over at The Stranger Slog lays out the case for the GET (Guaranteed Education Tuition) program. The legislators who are talking it down are - no surprise - some of very legislators who have turned on their own party, Rodney Tom and Steve Litzow along with Ross Hunter. (And, as Goldy points out, some live in some of the most expensive areas of Washington State.)
GET is Washington's prepaid tuition program, a
variant of the federally sanctioned tax-free "529 plans." Families buy
their children college credits at today's prices, plus a (sometimes
hefty) premium, and then cash out in the future, tax free, at the value
of the tuition and fees at Washington's most expensive university. One
hundred GET units equals a full year of tuition and fees, and the
current $172 unit price represents a 39 percent markup over the
University of Washington's $12,401 tuition and fees for the 2012-13
academic year. Tuition can't (and won't) keep rising at 20 percent a
year forever, so as an investment, GET isn't particularly a very good
value at the moment; there are many other financial instruments that
promise a higher rate of return.
But what GET does buy participants—what no other college savings plan
can possibly offer—is peace of mind. As its name implies, GET
is guaranteed, backed by the full faith and credit of the State
of Washington to deliver the college credits purchased.
Those legislators are saying Washington State shouldn't be in this business. You mean the business of affordable college educations for its citizens? And they miss this point that Goldy makes:
The return on investment is her education, not
the dollar value of the tuition.
How did GET get on faulty financial footing?
To be clear, GET's financial problems are not due to financial
mismanagement. GET's investment portfolio took a hit like everybody else
did during the recent financial meltdown, but has since recovered along
with the markets. GET's shortfall is due to the fact that it was
structured to anticipate 7 percent average annual tuition hikes rather
than the double-digit increases of the past four years. It is the
legislature that is responsible for GET's hole, through years of higher
education funding cuts, not GET. Lawmakers understood this consequence
when they allowed tuition to spike.
Some lawmakers would like tuition to rise substantially further—a high
tuition/high financial aid model that might make reasonable sense if
we'd actually fulfill the second part of that equation (which we
don't)—a policy to which GET is a major impediment. Tom and others also
lament GET as an obstacle to moving toward "differential
tuition" pricing, a model in which universities charge more for
certain high demand/high return majors like engineering and business
management. I suppose the arguments for such "reforms" might be genuine,
but they're hard to see as much more than excuses for further cutting
state support of higher education, shifting more of the cost onto the
backs of students.
He seals the deal:
No, GET isn't the solution. It's only an economic salve for those
fortunate enough to have the spare cash on hand to invest in it. But GET
isn't the problem either.
The problem is a political establishment that has gutted
state higher education funding in the name of "fiscal conservatism."
It's not GET that needs to be eliminated; it is those who are unwilling
or incapable of seeing its value.