[iron]

it's late and i'm sleep deprived and just started looking into the GET plans. this seems confusing to me, as in i don't see the benefit. can someone give me the gist of whether this is a good plan vs say a vanguard 529 plan?

[Randito]

With GET you buy state college tuition credits at the current price and use them later, when tuition cost per credit is higher. With a 529 the funds are invested in stocks, mutual funds, bonds or whatever instrument offered and the earnings are exempt from federal income taxes. When college expenses come due, funds from the 529 fund must be sent directly to a qualified institution. So 529 funds can be used for tuition, on-campus housing, books, but not such things as off-campus housing, groceries and misc living expenses. So GET was great investment when Washington state tuition costs were inflating 15% or more. Hard to get that rate of return consistently from other investments. In recent years the tuition inflation rate hasn't been as bad. In either case, your student will need additional resources to attend college -- either from investments, student loans, your or their earnings. FWIW: Attending community college to obtain a AA degree 1st and then transfer to a four year college is very cost efficient. However this will provide your student with less opportunity to make life long friends/business associates during freshman drinking parties.

[RichP]

+1 for the community college route. I did this and never regretted missing out on those overcrowded 100 level classes at a full blown U. Also had experienced and dedicated teachers rather than graduate student teaching assistants which can be hit and miss.

[HitTheTrail]

[grannyhiker]

I strongly agree with the community college route. For the first two years at a large university, you are either in a lecture room with 100+ people or are taught by graduate assistants. I was a graduate assistant once. Although I worked hard at giving it my best, I knew that I fell far short of an experienced teacher! Also, for community college faculty, the emphasis is on teaching skills, not obtaining research grants.

[JVesquire]

We bought two years of GET for each of our kids, then starting putting money in a 529, sort of to hedge bets. The thing about GET is that in some (or all, I forget) of the plans there is built in interest of 7 percent or something like that. So, you are assuming college tuition will be higher in 18 years than it is today, sometimes by a lot. For a brand new kid though, I think a few years of it is a good deal, particularly if you have the excess cash to just drop in and buy two years worth. It basically takes the worry off whether you can afford the first two years. Your kid is super young. Maybe she'll want to go to tech school, or get a full ride to Harvard. Who knows. There's no way to say now what will work for her.

[JPH]

When GET started, it was a smoking deal, then they realized it was too good of a deal and started charging "projected tuition rates" for the credits that were way (way, way) above the current tuition rate. I don't think it was good investment at that point. They have since backed the cost per credit way back down and I do think it is a good investment now with the $113/credit cost. This translates to one year of tuition at $11,300. That's almost the same as the current tuition. I was ready to completely write off GET a few years ago when the cost per credit was high, but at the current rate of $113/credit I'll buy in since our kids are 13+ years away from college.

[iron]

so, the takeaway is that if you buy GET credits, you're speculating that college rates will go up at a certain rate annually, and you're hoping that this rate is higher than the ROR for a 529 plan or your ROTH plan. not that it will, but if it did: what would happen if college was "free" (i.e. paid for by the govt) in 20 years? what provisions are in GET if you don't use the credits? (i suppose this is true if your kid doesn't go to college). i believe 529 plans have a 10% penalty, right?

[RichP]

[JVesquire]

I would love to pay a 10 percent penalty if college was free.

[HitTheTrail]

There is also the possibility that your child may not want to go to college at all. We assumed both of our kids would enroll and be dedicated students. That worked with our daughter but our son did not want to go but didn't tell us. And it almost cost him his life. He went to WSU one month and disliked it so much he dropped out and joined the army. That resulted in two live-fire tours of duty in Iraq then had PTSD after he got out. If we had known ahead of time we would for sure have supported him in a direction of his choice. It may have a happy ending though. He met a girl who helped get him back on track and he will finish his BS in mechanical engineering this fall semester. But it was touch and go for awhile.

[AlpineRose]

[HitTheTrail]

[JVesquire]

Sounds rough, HiT, but sounds like he's on a good path.

[InFlight]