Washington's 2 college savings plans could open next summer
SEATTLE (AP) - The committee that manages Washington's prepaid tuition program is planning to accept college savings again in 2017, around the same time the state will open a new, more traditional 529 college savings plan.
At a meeting in Olympia on Wednesday, the group also discussed extending the deadline for refunds from the Guaranteed Education Tuition program from this December to sometime next year, to possibly coincide with the opening dates of the college savings plans.
Some decisions on the exact timing for these plans are expected to be made at the GET committee's September meeting.
Since September, refunds have totaled $310 million, with more than 15,000 accounts making requests. Program officials say refund requests have slowed but have not stopped.
The GET program stopped accepting new payments - except for those on a payment plan - in August. At that time, they began planning for the future of the program and figuring out how to start the new 529 plan. It will not be a prepaid tuition program like GET.
The Legislature decided earlier this year that the prepaid tuition program should reopen and the state should start a more traditional 529 college savings plan as well.
Washington runs one of the few college-savings programs in the country that allows parents to pay tuition in advance. Traditional 529 plans, in which participants make choices about their investments and get no guarantees, are open in 48 other states. Both allow people to save for college and not pay federal income taxes on their investment earnings.
The committee has set a tentative date in July to reopen the GET program for prepaid tuition, but they probably won't know the unit price until the fall. The unit price will be based in part on the tuition rate the Legislature sets when it meets next year.
The new 529 plan could open next summer as well. It could be managed by an outside company or by a state agency. Requests for proposals are expected to be issued in September and due in November. Contracts are to be signed by January.
The results of a more informal request for information from potential investment management companies made program director Betty Lochner optimistic.
"We're headed in the right direction. The path is looking clear and we're excited to move forward," Lochner.
In September, the committee will also discuss a proposal to allow people to prepare for more than 500 units of future tuition, as has been requested by some Washington residents.