When Washington state’s legislature voted to reduce college tuition last year, it presented some families with a dilemma because they had bought into the state’s prepaid tuition program, known as Guaranteed Education Tuition, on the assumption that tuition would keep increasing. So the state has been offering penalty-free refunds since last September.
The GET program allows parents to buy units that they can use to pay for tuition once their kids reach college age. But the tuition reduction passed by state lawmakers left some participants stuck with units that cost more than they are currently worth. For that reason, the state won't be selling any new units until July of next year. The program is also offering penalty-free refunds to participants.
The program’s director, Betty Lochner, said more than 15,000 refund requests have come in, but that has not caused a problem.
"We really anticipated more than we got and I think most people are trusting the process," Lochner told a legislative committee. "We’re getting really pretty good feedback — very few complaints."
About $310 million have been paid out in refunds. The window for requesting a penalty-free refund ends in December, though the committee that oversees the program is considering extending that.
At the same time, the state is moving ahead with setting up a traditional 529 college savings program like ones in other states. Those programs allow families to invest money and withdraw it later for college tuition without paying federal tax on the investment earnings.
