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Amy Goan, MBA, CFP®
Email: amy@prismfinancialplanning.com
18708 SE 45th St., Issaquah, WA 98027
425-641-5717

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How Do Recent Decisions by the WA 529 GET Committee Affect Me?

In July of this year the Washington Legislature enacted the College Affordability Act, which lowers the cost of tuition at Washington's public colleges and universities. The GET Committee is considering the impact of the College Affordability Act on Washington's 529 GET program. They have had several meetings, with more to come. They are currently conducting a feasibility study to evaluate future options for the program.

For anyone who currently owns GET units, I highly recommend you visit http://www.get.wa.gov/news to learn what's going on in its entirety. However, I thought it might be useful to give you a rundown of what the Committee has already decided, and what you should do.

If you currently buy units on a Custom Monthly Plan:

What is happening? While the purchase of new units won't be allowed for most people for up to two years, if you're in the Custom Monthly Plan you may continue to do so.

What should I do? Nothing, if you'd like to continue to purchase units.

If you currently have automatic payments (ACH) to purchase new units:

What is happening? Your ACH payments have been inactivated because no new units are allowed for purchase for up to the next two years.

What should you do? Nothing.

If you currently have bill pay set up through your bank, or GET payroll deduction:

What should you do? Inactivate these accounts.

If your purchase price of GET units is $163 or greater:

What is happening? A check will automatically be sent to the account owner in December for a refund due to an overpayment of the amortization fee that you were previously charged.

What do you do? Nothing. Since this was an overpayment, there should be no tax-consequences.

If your purchase price of GET units is $117.82 or greater:

What is happening? Effective 9/2/2015 through 12/15/2016, the GET program will allow account owners to receive a refund of their contributions or the payout value (currently $117.82), whichever is greater. Please read the Update dated 9/2/2015 for more details. All state program refund fees and the two-year holding requirement will be waived.

What do you do? I recommend you take them up on their offer and get the refund. However, be sure to deposit your refund into another 529 plan within 60 days or there will be tax consequences. This is all outlined in their 9/2/2015 Update. It's not clear whether you can roll it directly (i.e. you never take possession  of the refund check) into another 529 Plan (I recommend the Utah College Savings 529 Plan), but if this is an option I would go that route.

If your purchase price of GET units is less than $117.82:

What is happening? Effective 9/2/2015 through 12/15/2016, the GET program will allow account owners to receive a refund of their contributions or the payout value (currently $117.82), whichever is greater. Please read the Update dated 9/2/2015 for more details. All state program refund fees and the two-year holding requirement will be waived.

What do you do? I recommend you wait to decide whether to remove your college savings from the GET program. Since you have until 12/15/2016 to request  a refund I'd wait until the GET Committee has made more policy decisions in order to evaluate the viability of the GET program as a college savings vehicle.

More to come...

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