Guaranteed Education Tuition (GET) Program: A Comprehensive Overview

The Guaranteed Education Tuition (GET) program, administered by Washington Education Savings Plans (WA529), is a 529 prepaid tuition plan designed to help Washington State residents save for future college expenses. Unlike traditional 529 college investment plans, GET offers a unique approach by allowing participants to purchase "units" that are guaranteed to keep pace with the cost of tuition at Washington's most expensive public universities. This overview will delve into the program's features, benefits, and considerations for potential participants.

Program Basics

The GET program operates as a prepaid tuition plan, where contributions are used to purchase units. Each unit represents a percentage of the resident undergraduate tuition at the highest-priced Washington state public university, such as the University of Washington or Washington State University. The WA529 Committee sets the unit purchase price, considering factors like estimated future tuition, projected inflation, investment returns, and administrative costs.

Enrollment: The enrollment period typically runs from November 1 to May 31 annually. Units can be purchased at the annual unit price through June 25 of each year.

Eligibility: To be eligible, either the account owner or the beneficiary must be a Washington resident at the time of enrollment. Individuals (including minors), UGMA/UTMA custodians, and legal entities can participate as account owners. Children of military personnel who claim Washington as their home of record are also eligible to participate in GET by submitting documentation of Washington residency when they enroll.

Contributions

Maximum Contributions: Participants can purchase up to 800 units at the annual unit price, with a combined fund limit of $500,000 across all Washington state 529 plans.

Minimum Contributions: A minimum initial contribution of $25 is required to open an account, with no minimum for subsequent contributions. For payroll direct deposit, the minimum contribution is $5 per account per month.

Payment Options: Contributions can be made through various methods, including:

Automatic withdrawal: Setting up recurring transfers from a bank account.
Payroll Direct Deposit: If the employer participates, contributions can be made directly from the paycheck.
Online payments: Transferring funds from a bank account through the electronic bank transfer system.
Savings Bonds: Liquidating savings bonds and transferring the funds.
Another 529 plan: Rolling over funds from another qualified 529 plan.

It is important to review IRS Publication 970 and the "Federal Tax Information" section of the GET Program Details Booklet and consult with a tax advisor regarding potential tax implications.

Contractual Features

Unit Value: The value of one GET unit is historically tied to 1% of the resident undergraduate tuition at the highest-priced Washington state public university. The payout value is adjusted annually.

Current Unit Price and Payout Value: For the 2025-2026 academic year, the unit price is $123.76, unchanged from the previous year. The payout value for the 2025-2026 academic year is $127.85. The WA529 Committee will determine the unit price for the 2026-2027 enrollment year in September 2026.

Read also: Navigating Ole Miss Housing

Guarantee: The GET program is backed by Washington State law (RCW 28B.95.050), ensuring that the value of the account keeps pace with the cost of the most expensive public university in Washington.

Time Restrictions: Units must be used within 10 years after the beneficiary's projected college entrance year or the first use of units, whichever is later.

Fees and Expenses

There are no enrollment or application fees associated with the GET program.

Taxes and Other Benefits

State Tax Deduction/Credit: Washington does not have a personal income tax, so contributions are not tax-deductible at the state level.

Qualified Expenses: The state conforms to the federal definition of qualified education expenses, including higher education expenses and up to $20,000 per year in tuition for elementary or secondary public, private, or religious schools.

State Tax Treatment of Distributions: Since Washington does not have a personal income tax, qualified distributions are not taxed at the state level.

Program Match: There is no program match on contributions.

State Financial Aid: Prepaid Tuition accounts may be considered when determining eligibility for State financial aid programs. It is recommended to check with the financial aid office of an Eligible Educational Institution for more information.

Resident Tuition Status: Participation in the program does not provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions.

Rewards Program: The Upromise Rewards program can be linked to any 529 college savings plan, including GET.

Using GET Units

Eligible Institutions: GET units can be redeemed at eligible educational institutions worldwide. Accounts have the same monetary value wherever they are used.

Minimum Holding Period: Lump Sum and Custom Monthly units must be held for at least two calendar years before they can be used. If you have a Custom Monthly contract, it must be paid in full before your units are eligible for use.

Qualified Expenses: GET units can be used for tuition and fees, room and board, books, computers, and other qualified higher education expenses as defined by IRS Publication 970. They can also be used for costs associated with some apprenticeships and certificate programs.

Usage Limit: Up to 200 eligible units can be used per academic year, with any unused units rolling over to the next year. The academic year runs from August 1 to July 31.

Distribution Methods: Distributions can be requested either as a Direct Payment (GET sends money directly to the school) or as a Reimbursement (GET reimburses the account owner for qualified education expenses already paid).

Alternatives and Flexibility

Transferability: Accounts are fully transferable to other relatives of the initial beneficiary.

Roth IRA Rollover: Unused funds can be rolled into a Roth IRA for the beneficiary, subject to certain conditions and limitations.

ABLE Account Rollover: If a student becomes disabled, savings can be rolled into an ABLE savings account in many cases.

Refunds: A refund can be requested, although taxes and penalties may apply.

GET vs. WA529 Invest

Washington State offers two 529 plans: GET and WA529 Invest. GET is a prepaid tuition plan, while WA529 Invest is a college investment plan.

GET: Guarantees that the value of the account will keep pace with the cost of tuition at Washington's highest-priced public universities. It is considered a more conservative option, as the state assumes the investment risk.
WA529 Invest: Offers several investment options matched to a saver’s risk tolerance and a student's age. The returns are subject to stock market performance, offering the potential for higher growth but also carrying more risk.

Managing Your GET Account

Account Control: The account owner maintains total control of the account and is the only one who can request account changes, distributions, or a refund.

Changing Ownership: The Account Owner Change form can be used to designate a new Account Owner.

Moving Out of State: Moving out of state does not affect the ability to make contributions or use the units for qualified higher education expenses. The value of the account will always be based on resident undergraduate tuition and state-mandated fees at the highest-priced Washington public university.

Potential Impact on Financial Aid and Taxes

Financial Aid: GET savings can impact financial aid eligibility, although the impact is typically small. It is recommended to consult studentaid.gov or a financial or tax advisor for an estimate.

Taxes: If the payout amount is higher than the total contributions and a refund is requested, a 1099-Q tax form will be issued. Account earnings may be subject to a 10% IRS penalty and will be taxed as ordinary income if not used for qualified higher education expenses in the same calendar year.

Opening a GET Account

To enroll in the GET Prepaid Tuition Plan:

Open an account online during the open enrollment period (November 1 - May 31).

Advantages of the GET Program

Guaranteed Value: The value of the account is guaranteed to keep pace with tuition costs at Washington's most expensive public universities, regardless of market fluctuations.
Flexibility: GET units can be used at nearly any college, university, or trade school in the United States and worldwide, or even for the costs associated with some apprenticeships.
State Backing: Investments in the program are backed by Washington State, providing financial stability and peace of mind.
Tax Benefits: The increase in account value over time, as well as disbursements to pay for higher-education expenses, are both tax-free.

Disadvantages of the GET Program

Limited Growth Potential: The returns may not be as high as those of other investment options, particularly in periods of strong market performance.
Residency Requirement: The account owner or beneficiary must be a Washington resident at the time of enrollment.
Potential Loss of Value: If in-state tuition decreases in the future, GET units may lose value.
Holding Period: Units must be held for at least two calendar years before they can be used.
Unit Price vs. Payout Value: The current GET unit purchase price is sometimes higher than the current unit payout value, so you may need to hold units for several years before the unit payout value exceeds the price you paid.

Committee Oversight

The Committee on Advanced Tuition Payment and College Savings governs the GET and WA529 Invest plans. This five-member committee includes the executive director of the Washington Student Achievement Council (WSAC), the State Treasurer, the director of the Office of Financial Management, and two citizen representatives. WSAC administers GET and provides oversight of the management of WA529 Invest under the committee's guidance. The committee meets at least quarterly to discuss legislative activities, review program policies and investments, and make program decisions.

tags: #guaranteed #education #tuition #program #overview