About the Beat

It is no secret the United States’ economy is in a recession. What has also become apparent in the past few years is that public education is one of the first items on the chopping block when budgets are reconstructed. The effects are felt at every level of the education system from elementary, middle and high schools to the state universities. Cuts to education budgets have been in the news for decades, and with each slash the results become more magnified. As a result, students and families have been taking on a larger financial obligation, especially at the collegiate level.
Now, with hard times falling upon more and more families, the decreased affordability of education is taking a more dramatic toll. That can even be seen in primary and secondary schooling. Private schools are becoming less of an option for Americans and that not only makes it more difficult for the schools losing enrollment to operate, but puts a larger burden on the already-stretched public schools those children are entering.
Another part of the education system that is taking a hit due to the economy is scholarships and financial aid. College tuition nowadays is a small fortune even at a state school, and there is less money being provided to help offset the cost for potential students. There are also more people applying for financial aid and scholarships than ever before because of the worsened economy, further compounding the problem.
As a student at Washington State University, I see first-hand the consequences these drastic budget cuts are having on our school, but we are not alone. As unbelievable as it sounds, it is even worse in some places and those nation-wide issues can offer a glimpse at what may be in store for this region. Follow me as I explore what happens in the education realm during the next four months and how it may affect the Northwest.
Please direct any questions or comments to mwalsh88@wsu.edu.

Thursday, February 19, 2009

Program 'Worth Saving' may not be Saving Enough

Just when it looked impossible, paying for college may get harder in the state of Washington.

This Associated Press story from Examiner.com, outlines what is going on with Washington's Guaranteed Education Tuition program.

Washington college tuition plan underfunded
Examiner.com

Olympia, Wash.- Washington's Guaranteed Education Tuition program may become a problem for the state because the stock market plunge has dropped the value of the fund's assets to 89 percent of future liabilities.

GET director Betty Lochner told The Seattle Times the program has enough money to pay all obligations for 15 years, but the state may have to rethink the deal it offers to new participants.
The program, which has been around 11 years and has nearly 100,000 participants, offers parents a chance to buy the cost of college in the future at today's prices.

If tuition rises at the 7 percent annual rate allowed by law, the GET program represents a savings plan with a 7 percent rate of return. Washington universities are seeking authority to increase tuition without legislative approval and are considering much larger increases to offset state budget cuts.

Parents participate in the GET program by buying education units at a rate set annually. They need to buy 100 units to pay for one year of resident undergraduate tuition and state-mandated fees at the most expensive Washington public university, either the University of Washington or Washington State University. It takes fewer units to prepay for less expensive schools and the units may also be used at out-of-state and private universities.

GET units currently cost $76, but they go up every year in May when the GET board resets the price. Lochner said the new price would be at least $7 more a unit, or a total of $700 more per year of college. The extra money is needed to shore up GET's finances and offset tuition increases.

When University of Washington President Mark Emmert was asked by a legislative committee last week about the effect of tuition increases on GET, he said it was a program "worth saving."

"The challenge, of course, is that you can't set a policy that will keep the GET program solvent by making the universities and colleges insolvent," Emmert said.

He said similar programs in other states have needed to change investments, reset base assumptions or change the payout for new entrants.

"Any number of those kinds of scenarios, I think, are going to have to be looked at under almost any model" in GET's future, Emmert said.

The number of participants also has been rising fast and soon will top 100,000. New participants will need to open an account by March 31 to take advantage of current prices, and another price increase could come as soon as September.
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