Washington College Savings Plans

Washington parents will have a new way to save for college early next year. The state is opening DreamAhead, a type of 529 plan offered by many other states. 529 college savings plans help families save for future higher education expenses—making college more affordable and thus more accessible.

Parents may also pay tuition in advance at a set price today through the state’s Guaranteed Education Tuition, or GET, plan. This plan just reopened on Nov. 1, after being closed for two years. Since 1998, GET has paid out more than $1 billion to 50,000 students attending schools nationwide.

DreamAhead 529 College Investment Plan

Intended to complement the GET program and provide additional savings options for Washington families, DreamAhead works differently than GET. DreamAhead’s investment returns will be tied to financial market performance.

Families interested in saving with DreamAhead will have multiple investment choices with varying degrees of customization and risk. “Year of enrollment” options will automatically adjust the investment mix as a student gets closer to college age. Stand-alone options will give investors flexibility to set and adjust their investment mix as they go.

GET Prepaid Tuition Program

GET allows participants to pay for future tuition via GET “units” purchased in advance. The new, lower unit price is $113 for the current enrollment period of Nov. 1, 2017, to May 31, 2018. GET units can be purchased in whole or partial amounts, from one to 600 units per student.

One hundred GET units are guaranteed to pay for a year of resident, undergraduate tuition and state-mandated fees at the state’s most expensive public college, no matter how much tuition costs may go up since the units were purchased. GET units can be used to pay college costs practically anywhere in the country and even at schools around the world.

Because GET is a state 529 plan, the after-tax money you put in will grow tax-free. When your child is ready for college, the money you withdraw will remain tax-free, as long as you use it for qualified higher education expenses.

You can open an account for anyone—your child, grandchild, a friend or even yourself. The only requirement is that either the account owner or the student is a Washington resident when you enroll in the program.

The earlier you start saving—such as when the child is in preschool or elementary—the greater the opportunity for increased value of your GET account. Why not “get” the whole family involved (grandparents, aunts and uncles) on birthdays or holidays and start saving today?

For more information on these two college savings plans, visit:

dreamahead.wa.gov

get.wa.gov

 

Kelly Lenihan