In Alert: Washington Prepaid Tuition Units Increase In Cost moi posted information about the Washington prepaid tuition program and resources which help a family decide whether the program is a good option:
There are some good articles about whether a prepaid college plan is a good idea for your family
1. Baby Center’s Saving for College: Prepaid College Plans
2. Saving for Your Child’s Education
3. Is Your Prepaid College Plan Safe?
4. How to Use a 529 Plan to Improve College Savings
Katherine Long is reporting in the Seattle Times article, Rising Tuition A Threat to GET Program
Several legislators say they are considering bills that would change the GET formula to control costs, possibly paying lesser benefits for families who purchase GET units in the future.
If Washington changes its GET program, the state would be following a national trend. A number of other states that offer prepaid-tuition plans have closed their programs to new enrollments or changed the terms of the plan because tuition rates are growing too fast for the programs to keep up.
GET is solvent today, but if every family enrolled in the program tried to cash in at the same time, it would only be able to pay out 86 percent of benefits, leaving a $255 million shortfall, according to one state study.
More than 120,000 families are enrolled, and the fund contains $1.4 billion in assets. The money is invested in stocks, bonds and other investments, much like a pension fund.
State officials are quick to note that families holding GET units today would not be shortchanged, even if there’s a shortfall or if a new GET program were introduced. The state guarantees that, if tuition increases outstrip the amount of money available in the current program, the Legislature must cover the shortfall.
GET program director Betty Lockner said the shortfall is just theoretical — the program could have some good investment years and tuition increases could moderate, erasing the funding gap.
But legislators say they don’t want to leave the state vulnerable to bailing out GET if the program can’t catch up on its losses.
Complicating the issue is pressure to increase tuition still more. Gov. Chris Gregoire’s proposed budget would increase UW and Washington State University tuition by 11 percent in 2011, and another 11 percent in 2012. Several bills already introduced this session would let the state’s colleges and universities set their tuition rates. Another big bump, or series of bumps, in tuition could exacerbate GET’s financial problems.
State Sen. Rodney Tom likened GET to a “poison pill” — the financial term that describes a corporation’s defensive tactic to prevent a takeover. In GET’s case, the program is “designed to keep tuition low in Washington state,” because the Legislature would be left paying the bill if tuition increases outstrip the state’s ability to pay for them through GET, he said.
“Whoever designed it was one of the cleverest legislators ever to hit Olympia,” said Tom, D-Bellevue, who heads the Senate’s Higher Education Committee.
The program was designed under the assumption that tuition would rise no more than 7 percent a year.
A bill to address the growing unfunded liability may come out of the Senate Ways and Means Committee in coming weeks, said state Sen. Ed Murray, D-Seattle, who chairs that committee.
GET is a program which is primarily aimed at middle and upper income families.
Laura Bassett has the post, Middle Class Children Increasingly Relying on Public Programs, Report Finds at Huffington Post:
Since the income gap between middle-class and wealthy families in the United States has grown by more than 50 percent since 1985, middle-class parents are increasingly relying on government-provided health and education programs to support their children, according to a new study by the Foundation for Child Development.
The FCD report finds that even prior to the recession that began in 2007, the gap in real family income separating a middle-class family — one with an annual income between $22,758 and $110,000 — from a high-income one expanded from $59,800 in 1985 to $93,100 by 2008. Between 2000 and 2008, middle-class families experienced a drop in real family income of more than $4,000, compared to a dip of just $139 for the top 20 percent of earners.
Despite a decrease in the median family income and a rise in the proportion of single-parent households and childhood obesity among middle-class families, health insurance coverage and prekindergarten enrollment have steadily risen in that demographic, suggesting that public health and education initiatives have played an increasingly important role in the welfare of middle-class children.
Donald Hernandez, senior adviser to the Foundation for Child Development and author of the report, said his findings show that middle class is clearly not what it used to be.
“It makes me ask the question, ‘What is the middle class?'” he told HuffPost. “We used to think of it as having the capacity to pay for a lot of basic needs and services, and that’s less and less the case from the point of view of children and the increasing need they have to depend on government programs to get basic early education and health care.”
For U.S. children, things may seem dire: The nation’s child poverty rate rose to 20.7 percent in 2009 from 19 percent in 2008, making it the highest of any age group. The welfare of middle-class children has also been declining over the past quarter-century in more areas than income and basic needs, according to the FCD study. The growing proportion of single-parent households and households without a securely-employed parent, as well as a decline in residential mobility, suggest that social relationships deteriorated for middle-class children between 1985 and 2008, and likely worsened during the recession.
How does this country provide a decent standard of living for its citizens???????????
Dr. Wilda may be contacted at [email protected]
To receive updates from the Seattle Public Education Examiner, just click “subscribe” at the top of the story and enter your email address, which will not be shared.
Dr. Wilda says this about that ©