Washington State GET Program Rollover Opportunity
Lars Phillips | July 15, 2018
Putting money away for college for your kids, grandkids, or any other child in your life, is one of the easiest ways to make a meaningful impact on that child’s future.
For those that have saved into the Washington Guaranteed Education Tuition (GET) Program and still have GET Program credits – an incredible opportunity exists until September 12th to increase the value of your GET credits dramatically.
First, a little background information. Most states have college savings programs that are referred to as 529 plans. These accounts function much like a Roth IRA – dollars that are invested grow tax free, and no taxes are owed when funds are distributed as long as the funds are used for qualified education expenses (tuition, room, board, books, fees, etc.).
Washington’s GET Program functions a bit differently. Investors in the GET program purchased credits at a set price, and each credit was previously guaranteed by the state of Washington to be worth 1/100 of a year in-state tuition and fees at Washington’s most expensive public university – so 100 credits would cover 1 year of in-state tuition, and 400 credits would cover 4 years of in-state tuition.
With rising tuition costs, the GET Program would seemingly be a great option for investors looking to save for college, but in 2015, the state of Washington cut in-state tuition by 15-20% and tied future tuition hikes to hourly wage growth in the state. At the same time, the stock market was continuing its historical run, leaving the GET program overfunded by nearly $600 million. In March 2018, the state of Washington signed a bill into law which shares these proceeds with GET program investors willing to roll their GET credits into Washington’s new DreamAhead 529 plan at a new stated rate of $143/credit. This represents a huge increase of nearly 38% over the current value of $103.86 per credit.
For a family with 100 credits, this means an extra $3,914 for college. For a family with 400 credits, it means an extra $15,656 for college!
For those reading this who have GET credits, or if you have friends or family with GET credits, know that you only have until September 12th, 2018 to take advantage of this deal. It’s a move that we see as having almost no downside, and a decision that could make a big impact on the life of a child.
Helping get kids through college is something we’re incredibly passionate about and one of the most rewarding parts of our jobs. Obviously, if you or a loved one has GET credits and would like to discuss this in greater depth, give us a call or send us an email. We’re happy to help.