Saving for your children’s future education is one of the most important investments a parent can make. According to the Federal Reserve Bank’s Economic Data, $1.7 trillion dollars in student debt is collectively held among approximately 46 million Americans. Participating in college savings plans such as WA529, or GET help alleviate the challenges of paying for higher education including tuition, fees, books, supplies, and even some room and board costs. Starting early with college savings plans can significantly ease financial burden, potentially reducing or even eliminating the need for student loans or other financial services.

What is a 529 Plan?

529 Plans are a low-maintenance investment account offering tax-advantaged savings for education by growing on a tax-deferred basis, providing tax-free distributions when used for qualified educational expenses. 529 plans are flexible and have high maximum contribution limits unlike a Roth IRA or Coverdell Education Savings Account, including state income tax deduction, or credit, depending on your state of residence.

Additional features of a 529 plan:

  • “set it and forget it” management style, through an automatic investment plan funded by a linked bank account or payroll deduction.
  • No annual contribution limit, and high aggregate limits ranging from $235,000 to $529,000, depending on state of residency.
  • For tax purposes, contributions are classified as “gifts”; up to $18,000 qualifies for the annual gift tax exclusion.
  • Parent-owned plans are more likely to receive favorable financial-aid treatment

Guaranteed Education Tuition (GET)

Apart of the 529 plan family, GET (Guaranteed Education Tuition) is a prepaid college tuition plan, that helps families save for future education expenses, including technical schools. As with any savings, the earlier you start, the more time you have to save, increasing the opportunity for the GET account to grow in value.

Funds can be used for a variety of qualified expenses including tuition, supplies, computers, room & board, AND it’s flexible- the account owner maintains complete control over the distributions and use of funds. In the event your child chooses an alternative career path outside of higher education or receives full/majority funding from scholarships, hold onto the GET account just in case of a change of plans. It can also be transferred to another family member, saved for graduate school, or in some cases, be rolled into a retirement fund for the student (beneficiary).

Did we mention GET funds are not invested in stocks? This means they are not subject to the fluctuations of the stock market. They are guaranteed to keep pace with tuition and state-mandated fees at Washington State’s most expensive public universities. If future tuition increases ever require the program to pay out more money than is available, the difference will be covered.

How GET Works

Video courtesy of WA529
Learn more about WA529 programs and plans

Content Credit: Ann Monroe, HRS Benefits Director; Carey Musburger, Learning and Organizational Development Assistant