Parents hail tuition savings extension
Friday, August 25, 2006 7:07 AM PDT
By Stephanie Mathieu
Printable version
E-mail this articleWhen her children's birthdays roll around, Melissa Busby of Kelso tells friends and family to "buy them some units."
Used to pay for future college expenses, these "units" are bought through Washington's Guaranteed Education Tuition (GET) Program with a promise that the money invested will keep up with rising tuition costs. One unit can be purchased for $70, and 100 units pay for one year of college tuition, no matter how much tuition has increased by the time the GET participant starts college.
"It takes a huge weight off my shoulders," said Busby, who now has the first year of college paid for her 3-year-old daughter and 5-year-old son.
And the deal just keeps getting sweeter, she said.
President Bush signed a bill Aug. 17 making money gained through prepaid college programs permanently tax exempt. The exemption in place was going to expire in 2010, troubling parents with younger children and GET accounts.
When GET participants enroll in college, each 100 units are valued at the cost of one year of undergraduate education at the most expensive in-state public college. If the student goes to a less expensive college, the leftover money can be spent on other education expenses such as room and board and text books.
Tuition at Washington state public colleges have risen an average of 7.1 percent each year during the past 25 years.
If students spend more money by going to graduate school, a private university or out of state, they will have to pick up the difference. The accounts can be used by parents, hopeful parents and adults planning on attending college in the future.
Longview resident Margit Brumbaugh used an on-line tuition calculator to predict future college costs for her two sons. If 11-year-old Austin gets his degree at an in-state, public college, it could cost roughly $130,000 including living and text book expenses. And Aaron, 9, could spend about $150,000 to get his degree.
Margit and her husband, Mark Brumbaugh, have purchase 50 units for each son thus far. They hope to have 500 units -- the maximum allotted -- by the time Austin and Aaron start college.
Melissa Busby and her husband, Randy, bought a lump sum of 100 units each for their two children at $66 per unit, meaning they bought two years of education expenses for $6,600 each.
"That's a huge savings," Busby said.
Another new bonus this year, GET account gains won't affect college hopefuls who are filling out their FAFSAs (Free Application for Federal Student Aid). Profits used to be counted against the applicant's family as a resource.
This is important because "there are a lot of people who don't qualify for aid, but also can't afford college," said Brumbaugh, who is also an advisor at Lower Columbia College.
But there are some catches with the state program. It takes about three years before GET participants see results, program officials said, and investors are required to wait at least two years before retrieving their education dollars.
GET participants can purchase a maximum of 500 units, and students who don't go to college straight out of high school have 10 years to use their units. If they don't, money units can be transferred to a family member or refunded.
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