Tag Archives: Budgeting

GET’s Response to Lowered Tuition

Last night the Washington State Legislature passed a budget and accompanying legislation to lower tuition at the state’s colleges and universities. This legislation is expected to be signed into law by the Governor today. This historic event will make college more affordable and accessible for more Washington families and current students. Below you will find responses to questions arising from this legislation in order to provide you with more information about the impacts to the GET program.

In the meantime, customers with account-specific questions can call the GET Contact Center at 800-955-2318 or email getinfo@wsac.wa.gov. As information becomes available, updates will be shared on the GET website.

What does lower tuition mean for students today?

  • This historic event will make college more affordable and accessible for more Washington families and current students.
  • More specifically, tuition will be reduced at the state’s two research institutions (UW & WSU) by five percent in the 2015-16 academic year and by another ten percent in the 2016-17 academic year for a total two year reduction of 15 percent. This is important because these are the two institutions for which GET’s payout value is based upon.
  • The legislation goes on to say that beginning in the 2017-18 academic year, tuition operating fees for resident undergraduates at community and technical colleges, may increase by no more than the state’s average annual growth rate in median hourly wage as determined by the Federal Bureau of Labor Statistics.

How will this impact my student if they are needing to use their units in the next two years?

  • In response to lower tuition, the legislation states that for the 2015-16 and 2016-17 academic years, the GET Committee shall set the payout value for units redeemed at the 2014-15 rate of $117.82 per unit.

What happens to the value of my account if I am not going to use my units in the next two years? Will I lose money?

  • Beginning in the 2017-18 academic year, the GET Committee is required to make the necessary program adjustments to ensure GET customer accounts are not decreased or diluted as a result of lower tuition. This may include a cash refund, additional units, a minimum payout value, or another solution that is deemed appropriate. Part of a feasibility study the program will be conducting during the next 18 months is to develop a resolution to this issue.

What is the GET Committee going to do about the future of the program?

  • By December 1, 2016, the legislation calls for the GET Committee to review and report to the legislative fiscal and higher education committees on the following:
    • The impact of reducing tuition on the funded status of GET and future unit prices;
    • The feasibility of establishing a traditional 529 college savings program;
    • Alternatives of linking GET to tuition and fees and linking GET to a cost of attendance metric;
    • And the current state penalty for nonqualified withdrawals
  • Details regarding next steps for the GET program will be discussed at the GET Committee meeting on Monday, July 13 from 2 to 4 p.m. at Senate Hearing Room 3 on the Capitol Campus in Olympia. As information becomes available, updates will be shared on the GET website.

Does the two year freeze in payout also mean a two year freeze in unit cost? Does this mean the current unit cost is now calibrated to a tuition cost 15% less than today?

  • These are good questions and issues the GET Committee will be addressing. The Committee will be meeting on Monday, July 13 to begin conversations around future unit pricing; however, a great deal of analysis will need to be done by the State Actuary and other financial experts before any future pricing formulas will be considered.

Cousin’s Legacy Lives on Through Investments in Children’s Futures

Simon Sinek Start with Why

Fifteen years ago my cousin Michael passed away after a tragic airline accident. He was only 30 years old and had a bright future ahead of him. Over the years following my cousin’s death, my aunt and uncle searched for ways to honor Michael’s life. One of the ways they chose to recognize Michael’s contributions to the world was by establishing a 529 college savings account for both my daughter and my son. My aunt and uncle believed education was the one way Michael’s legacy could be carried on by giving my children the opportunity to follow their dreams and aspirations through a college education.

My aunt and uncle’s choice to celebrate Michael’s life through a 529 plan contribution was not based on maximizing investment returns in order to make a lot of money; it was a much deeper and meaningful decision. They simply wanted to ensure all the amazing experiences that were afforded to Michael because of his education were passed along to the next generation of our family. In fact, I remember Michael’s college graduation pretty vividly since it was the first I had ever attended. I recall thinking at the time, how cool it was that he achieved such a high level of education. That memory was left engraved in my mind and was something I circled back to when I needed a little motivation with my own studies.

Golden Circle By Simon SinekLittle did I know that 25 years after Michael’s graduation I would be in a profession focused on helping families prepare and save for their children’s college education. The memory of Michael and what my aunt and uncle did to honor his life is something I think about almost every day in marketing Washington’s Guaranteed Education Tuition (GET) college savings plan. So often in marketing investment products, we get caught up in focusing on the features and benefits of our products and we forget about why families are making the decision to save for a higher education.

In Simon Sinek’s TED Talk titled “Start with the Why” he discusses the fact that “people don’t buy what you do, they buy why you do it.” Sinek focuses his discussion on the “why” section of our brains that controls our trust, loyalty and feelings. He says great leaders and great businesses put their energy into inspiring us. He refers to Dr. Martin Luther King Junior’s “I have a dream speech” and he says there is good reason why he did not call it “I have a plan speech” with a 30-point agenda. MLK was so successful because he got people to take ownership of his ideas and share them as their own original thoughts and beliefs. This is exactly what we are doing each day in the college savings industry; we are working tirelessly to inspire families to develop strategies for their children’s educational future.

In his book “A Million Miles in a Thousand Years,” author Don Miller asks the reader if a movie based on a guy who works his entire life to buy a Volvo would move a person to tears when he finally saves enough money to drive this luxury sedan off the lot. The answer of course is no; however, as he points out, this is how most people live their lives. In looking at our lives as a story, Miller says we can learn a lot about how to make life interesting and meaningful. And if you look at education and its role in our lives, it is the core plot of our life story. School is where we create lifelong friendships, establish our values, attain job and life skills, acquire mind-opening knowledge and explore the world around us through life-altering experiences. Education’s relevance in our lives is huge and 529 plans are at the heart of making these learning experiences possible.

We take the responsibility of educating families about the benefits of 529 plans very seriously because the impacts are far-reaching. The college savings industry is very different than other sectors of the economy where business leaders look for ways to reduce services and product offerings in order to maximize revenue and earnings. When it comes to 529 plans, the focus continues to be on how to improve, enhance and expand our services and customer benefits because the more we can help the next generation save and prepare for their future, the better off our society will be in the long-run.
Close to three years ago, my uncle who helped set up my children’s 529 plan passed away after a hard-fought battle with cancer. His passing was just another reminder about how short life can be and the importance of the precious time we share with family and friends. When it is all said and done, we can’t take anything with us and the only thing we can leave behind are experiences that live on as memories with those we love and the legacy of our kindness and compassion for helping others live a happy and consequential life. My uncle and my cousin succeeded in this mission and I believe it is my responsibility to help other families reach the same goals.

Written by Ryan Betz, Associate Director of GET Marketing & Communications

Forming Strong Habits is Key to Building a Bright Future

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On Sunday, May 31, we will be closing out our 17th enrollment year here at GET. This time of year is always so encouraging, as we see thousands of families making the decision to take action and get started, saving their way to a bright future for their children. If you’ve been thinking about starting your child’s college savings, but just haven’t been able to get to it yet, now is a great opportunity to take the plunge.

The good news is that once you take that first step and get started, the rest becomes easier. The key is to make the act of putting money away for college a habit. I recently read a book called The Power of Habit, by Charles Duhigg, that I found to be quite powerful (no pun intended). As Duhigg puts it: “Most of the choices we make each day may feel like the products of well-considered decision making, but they’re not. They’re habits.” The three main elements of a habit are: a cue that triggers action, a routine response to that cue, and a reward for that particular course of action. It’s a cyclical process that feeds itself, which is why, for good or bad, habits are very difficult to break.

Now let’s have a look at how we can apply this framework to college savings specifically. The cue could be anything from seeing the rising cost of college, or talking with your kids about what they want to be when they grow up. The reward can be immediate: seeing your college savings account grow; or far out into the future: imagining your children’s long term success and happiness, or knowing they won’t be saddled with mountains of student loan debt. Of course, the hardest part to get going is all that work in the middle – the routine. For maximum success, many families find it helpful to make regularly scheduled contributions to their accounts. This can be in the form of monthly payment plans, or making bigger deposits at the same milestones each year (birthdays, holidays, the end of a school year, etc.). Of course, every family has a different routine that works for them, but the key is to find a routine that is predictable so that it becomes second nature.

Duhigg’s concepts are simple, yet profound. If we take the time to understand what drives us and fully commit ourselves to creating new habits that will help us reach our goals, we can make big impacts. College savings is no exception. It’s not an easy undertaking, but once you start, establish a routine, and keep your rewards in sight, your college savings plan will be a force to be reckoned with. So, with this year’s enrollment deadline around the corner, we encourage you to heed Smashmouth’s advice from the song, Walking on the Sun: “Don’t delay, act now!” But don’t worry, supplies are not running out – there’s plenty of GET to go around. It’s easy to enroll online at www.get.wa.gov.

Written by Lucas Minor

Thanksgiving: A Great Time to Recognize the Education Pilgrims in Our Lives!

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On May 9, 1998, I was the first person in my family to graduate from college. This was not a fluke, it was an intentional goal set by my parents the day I was born. Neither my mom nor my dad had the opportunity to pursue a degree.

My mom is a self-taught computer programmer who became independent at the age of 16 and worked full-time while finishing high school. My dad is the son of a farmer from Iowa who was captured while building runways in Japan during WWII. He was held as a prisoner of war for close to six years. Because my grandfather’s health was not the best after the war, my dad also worked through high school to support his family and when he graduated, college was not an option.

Throughout their careers, my parents inspired me with their work ethic, positive attitude and compassion for others. Dad worked nights so he could be there for us when we got home from school and for a while he worked selling real estate on the weekends. My mom was constantly learning new skills and programming languages to stay relevant in a male dominated industry that was changing by the minute.

_95A1504It wasn’t until I was older that I realized my mom worked with really smart people who had master’s degrees in computer science from MIT. I also realized that my dad had built a business importing and exporting goods to China based on common sense people skills he learned from decades of customer service work.

The reason I didn’t recognize how hard my parents worked was because they never talked about their jobs; they were too busy giving my sister and me every opportunity to grow and succeed in and out of the classroom. While my parents did not have very much money in the early years, they always put money aside for college. They were going to ensure that our dreams would not just be fantasies but attainable realities.

When researchers at Washington University in St. Louis recently announced that students with a college savings account in their name are seven times more likely to pursue a post-secondary education, I was not surprised. Growing up knowing that hard-earned money had been set aside for me to go to school was a huge motivator for keeping good grades and pushing me with challenging pre-requisite college courses. I knew a lot of people in my family had worked and sacrificed for generations to give me that opportunity to further my education and I was not going to let them down.

As we approach Thanksgiving, I am so grateful to my parents for their love, mentorship and belief in the transforming power of a college education. If you have the opportunity this holiday season to thank a teacher, coach or parent for their investment in you, do it and be sure to let them know how they’ve made a difference.

Written by Ryan Betz

Finding the Perfect Holiday Gift

 

The holidays are right around the corner, and you know what that means – gift shopping! Love it or dread it, finding the perfect gift can often be a challenge. When it comes to shopping for kids, the good news is they’re not shy about letting you know what they want (or about reminding you what they want over and over again).  The bad news is that even if a kid’s wish list is a mile long, there’s always that one toy that he “really, really wants more than anything else in the world,” and it’s about as impossible to find as a polar bear in a snowstorm. And if you do actually find it, you may have to fight tooth and nail for the last one. Then after the holidays are over, that dream toy that he “had to have” is soon cast aside in favor of the next new and exciting thing.

What if there was a gift that you knew would never be out-of-stock, lasted a lifetime and didn’t even require wrapping?

This year when relatives ask what your little one wants for the holidays, consider asking for the gift of education. A contribution to a child’s college savings is a thoughtful gift that shows a commitment to his or her future success. Not only does the gift of college savings help families reduce the future cost of college tuition by saving early, it sets a precedent that higher education will be an integral part of their child’s life. In fact, studies show that if children have a college savings account in their name and know it, they’re seven times more likely to go to college.

Further, an investment in higher education will reduce the need for student loans, which will be a huge burden off of the back of your future college graduate. Then comes the job search – studies show that by 2018, nearly 70% of all new jobs in Washington state will require some form of post-high school education. All these considerations make it easy to see why a contribution in a child’s future education is truly a gift that will keep on giving for years to come.

When it comes to giving the gift of education, GET makes it easy for the whole family to get in on the action. Grandparents, aunts, uncles, cousins, second cousins, friends, and anyone else who wants can simply go to the GET homepage and click the blue “Give the Gift of a GET Account” button, and choose to contribute to an existing account or open a new account for a child. Here, giftors will also find colorful, customizable gift announcements to present to the lucky beneficiary.

christmas story picThe gift of college savings is a meaningful gift that’s always the right size, will last a lifetime, and best of all, unlike an official Red Ryder carbine-action two-hundred-shot range model air rifle, it won’t shoot your eye out.

 Written by Lucas Minor

GET Program Returns to Fully Funded Status

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There is no doubt that education is the key to unlocking the door to opportunity. Throughout the past several years, new research continues to provide supportive evidence that a college degree not only increases the economic earning power of both individuals and our state economy, but it’s also proven to contribute to improved health and other social benefits such as increased homeownership, voting rates, and community volunteerism.

While there is no denying that the cost of a college education has increased dramatically over the past two decades, the citizens of Washington state continue to display their growing value of a college degree by saving more of their hard-earned dollars for their children’s future higher education expenses. In fact, since 1999, Washington’s Guaranteed Education Tuition (GET) program has paid more than a half billion dollars in higher education expenses on behalf of more than 37,000 students.

funded status calloutThe GET program now manages more than 157,000 college savings accounts that are valued at close to $3 billion. Just recently, the State Actuary, Matt Smith, announced that the program’s funded status is 106 percent and it is expected to meet all of its financial obligations for current enrollees.

The financial health of the program has definitely improved over the past few years. Last year, the program enhanced its solvency report card grade from a “B” to an “A” rating and this year the program surpassed its 2021 projected funded status (seven years earlier than expected). The positive change in the program’s funded status is due primarily to strong investment returns and the fact that tuition did not increase at the state’s universities for the second straight year.

Having tuition continue to remain flat is a huge reprieve for Washington families who experienced double-digit tuition growth from 2009 to 2013. Over the past 10 years, tuition has increased an average of 8.6 percent per year, which has contributed to the growth in student debt that is now valued at more than $1.2 trillion nationally.

Ultimately, our goal as an organization is to switch the personal finance of higher education from a debt-driven model to a savings-driven model so that when a student completes their degree, they have the financial freedom to pursue their dreams and take an active role in contributing to our state’s economy and communities.

We strive to accomplish this goal every day by offering Washington families incentives, tools, and resources to help them save, make wise investment decisions, and to make it as easy as possible to make regular contributions to their accounts. By providing these resources to families, their children will be better positioned to continue to grow and prosper in their academic pursuits.

Written by Betty Lochner, GET Program Director

Top 10 reasons to save for college

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Another September is here, and that means another College Savings Month! This month is a time where 529 plans around the country commemorate college savings and recognize the importance of starting while kids are young. In that spirit, we’re kicking off our celebration with some reminders of why saving for college is so important:

1) Reduce the need for student loans.
With student loan debt now at an average of $30,000 per borrower, and with total nationwide student loan debt surpassing $1 trillion, it’s more important than ever to save now to avoid borrowing later.

2) Expand your child’s college choices.
Your college savings have the potential to expand your child’s college choices. If an Ivy League school comes calling, wouldn’t it be great to tell your student “We’re so excited to support you in this opportunity,” rather than “We wish we afford this opportunity.”

3) Create a college-bound culture for your family.
Studies show that children who have college savings accounts in their name and know it are seven times more likely to do well in school and go on to college. Plus, setting this precedent for your children may lead them to do the same when they start their own families.

4) Reduce stress.
Your savings efforts will pay off in peace of mind. You and your children will be able to focus on “where” they want to go to school instead of “if” they can even go.

5) Create financial literacy learning opportunities for yocollegesavingsbankur kids.
Use your thoughtful planning and saving as a tool to teach your kids about the importance of being prepared, managing finances and the time value of money.

6) It makes a great gift.
The gift of college tuition is one that will keep giving for a lifetime by giving your child access to academic and personal growth opportunities as well as expanded employment options.

7) Improve your children’s long-term financial security.
Without the burden of tens of thousands of dollars of student loan debt, your children will be better set up for their own economic prosperity – the ability to purchase a home, start putting away for retirement and of course, start saving for their own kids’ college education.

8) Pay less for college costs.
By saving while kids are young, you’ll give your money the opportunity to work for you and grow in value. Pair that with the reduced need to borrow money, and the total college bill will set you back significantly less.

9) Keep your household expenses in check.
By committing to saving, you’re simultaneously making a commitment to reduce your spending. You’ll be amazed to find how much money slips out the back door when you’re not looking.

10) Ensure your nest stays empty in the future.
By setting your kids’ up with the tools they need to be marketable in the business-world and by helping them achieve financial independence by reducing the need for loans, you’ll get a chance to enjoy one of the best benefits of saving for college. Just think about how nice it will be to have your space back and your pantry full.

These are just a few of the many great reasons to save for college while your kids are young. The most important thing to remember is to not let the prospect of how much college may cost in the future be overwhelming or discourage you from getting started. A dollar saved today is a dollar (or more) you won’t have to borrow down the road. Beyond that, when you make an investment in your children’s futures, you are setting them up for a lifetime of opportunity!