Guaranteed Education Tuition Program
Encyclopedia
The Guaranteed Education Tuition Program, or GET Program, is a 529 savings plan
administered by the U.S.
state
of Washington for residents of the state. As with any 529 plan, account owners invest in the program on behalf of a beneficiary – typically the owner's child or grandchild – in order to prepay for expenses associated with the beneficiary attending a higher education
institution.
payout value of one unit is always equal to one percent of the annual full-time, undergraduate, in-state tuition and state-mandated fees at the most expensive public university
in the state – either the University of Washington
or Washington State University
. The purchase price of one unit is slightly higher than the payout value.
Use of the funds invested in GET are restricted to tuition and other expenses associated with higher education
(e.g., room and board, books, mandatory fees). Units purchased must be retained for a minimum of two years before they can be used. Investments are not tax-deductible; however, the increase in account value over time, as well as disbursements to pay for higher-education expenses, are both tax-free. Disbursements for purposes other than to pay for higher-education expenses are subject to income tax
es and/or penalties imposed by both the program and the Internal Revenue Service
; exceptions are made for certain circumstances such as the death of the beneficiary or the beneficiary receiving a scholarship
, in which case income tax is still imposed but penalties are not.
Accounts may only be opened by, or on behalf of, Washington residents; however, disbursements from the program may be made to any higher education institution in the United States, as well as some foreign institutions, that participate in financial aid programs through the United States Department of Education
.
Investments in the program are backed by the state; i.e., the state assumes all investment risk and guarantees that returns on investments will keep pace with inflation and increases in college tuition over time. The program currently does not receive any appropriations from the state; however, per state law RCW 28B.95.050, the state is required to provide funding in the event that the program's available funds are insufficient to cover its payout obligations.
529 plan
A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary.- Overview :529 plans are named after section 529 of the Internal Revenue Code...
administered by the U.S.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
of Washington for residents of the state. As with any 529 plan, account owners invest in the program on behalf of a beneficiary – typically the owner's child or grandchild – in order to prepay for expenses associated with the beneficiary attending a higher education
Higher education
Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...
institution.
Overview
The GET Program is a prepaid 529 plan, and accounts may only be opened by, or on behalf of, residents of the state of Washington. The value of an account is dictated by the quantity of "units" purchased. Units have a purchase value and a payout value which are subject to increase twice yearly. The U.S. dollarUnited States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
payout value of one unit is always equal to one percent of the annual full-time, undergraduate, in-state tuition and state-mandated fees at the most expensive public university
Public university
A public university is a university that is predominantly funded by public means through a national or subnational government, as opposed to private universities. A national university may or may not be considered a public university, depending on regions...
in the state – either the University of Washington
University of Washington
University of Washington is a public research university, founded in 1861 in Seattle, Washington, United States. The UW is the largest university in the Northwest and the oldest public university on the West Coast. The university has three campuses, with its largest campus in the University...
or Washington State University
Washington State University
Washington State University is a public research university based in Pullman, Washington, in the Palouse region of the Pacific Northwest. Founded in 1890, WSU is the state's original and largest land-grant university...
. The purchase price of one unit is slightly higher than the payout value.
Use of the funds invested in GET are restricted to tuition and other expenses associated with higher education
Higher education
Higher, post-secondary, tertiary, or third level education refers to the stage of learning that occurs at universities, academies, colleges, seminaries, and institutes of technology...
(e.g., room and board, books, mandatory fees). Units purchased must be retained for a minimum of two years before they can be used. Investments are not tax-deductible; however, the increase in account value over time, as well as disbursements to pay for higher-education expenses, are both tax-free. Disbursements for purposes other than to pay for higher-education expenses are subject to income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
es and/or penalties imposed by both the program and the Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
; exceptions are made for certain circumstances such as the death of the beneficiary or the beneficiary receiving a scholarship
Scholarship
A scholarship is an award of financial aid for a student to further education. Scholarships are awarded on various criteria usually reflecting the values and purposes of the donor or founder of the award.-Types:...
, in which case income tax is still imposed but penalties are not.
Accounts may only be opened by, or on behalf of, Washington residents; however, disbursements from the program may be made to any higher education institution in the United States, as well as some foreign institutions, that participate in financial aid programs through the United States Department of Education
United States Department of Education
The United States Department of Education, also referred to as ED or the ED for Education Department, is a Cabinet-level department of the United States government...
.
Investments in the program are backed by the state; i.e., the state assumes all investment risk and guarantees that returns on investments will keep pace with inflation and increases in college tuition over time. The program currently does not receive any appropriations from the state; however, per state law RCW 28B.95.050, the state is required to provide funding in the event that the program's available funds are insufficient to cover its payout obligations.