For many families, saving for a child’s college education is an important part of their wealth management plan. While 529s are one of the most common ways to do this, many families in the Seattle area have also utilized “GET,” Washington’s state-sponsored college savings plan.

But today, in the wake of some critical legislation changes, “GET” is facing new challenges that could alter how families view and use the program.

What is GET?

The Washington State Guaranteed Education Tuition (GET) program is a pre-paid college tuition plan that, until recently, offered Washington residents the ability to purchase “units” of tuition that can be redeemed for college tuition in the future. The State of Washington guarantees that 100 GET units are redeemable in the future for the value of one year of tuition at the most expensive public university in Washington, and can be applied to any higher education institution in the nation.

What is changing?

This year, Washington State lawmakers passed the College Affordability Act to lower tuition at Washington State’s public colleges and universities. Specifically, tuition will be reduced at the University of Washington and Washington State University by 5 percent in the 2015-16 academic year and by another 10 percent in the 2016-17 academic year for a total two-year reduction of 15 percent. These policies dramatically affect the growth assumptions that GET has been based on and create concern that the units that families have purchased will actually lose value as tuition goes down.

In response, the GET board has announced a number of changes and is continuing to conduct feasibility studies to determine the future of the program. Effective immediately, the GET payout value will be frozen at $117.82, and will stay at that level until one-year of resident undergrad tuition and state mandated fees at Washington State’s highest priced public university surpasses $11,782. Customers may also request a refund or 60-day rollover into a traditional 529 college savings plan, and will receive, at minimum, the current payout value of $117.82 per unit (or their contribution value if it is greater). The deadline to request a refund or 60-day rollover is Dec. 15. The program is currently closed to new unit purchases until the board completes an evaluation of future options, which is expected to be completed by Dec. 15.

What should families do?

Each family’s goals, preferences, life stage, and situation are a little different, and any recommendation should factor in those considerations.

Here are some thoughts to help frame your discussions:

1. For very young children, the basic GET program benefit remains the same. If you “overpaid” for recent units, the amount of overpayment will be automatically refunded to you. While the GET program essentially offers “no gain” for the next two years, it may well offer inflation protection again after that time. For those whom that still appeals to, it may be appropriate to stay with the program.

2. For GET beneficiaries who have started or are very near starting college, the security of the GET program also maintains its appeal as it is likely simpler and cheaper to hold your GET units. For the foreseeable future, the unit payout value will remain at $117.82 – the minimum – and will not decline with lower tuition rates.

3. For those families with children in the middle years, rolling over all or a portion of their GET balances to a 529 savings plan may have merit. In this scenario, you would forego the certainty of the GET program for the uncertain upside of a growth mutual fund investment. It is important to note that rolling over an existing GET account balance into a 529 savings plan must be completed within 60 days of receiving the refunded amount from the GET program to avoid penalties.

Andrew Kloess is a financial advisor in the Kirkland office of RBC Wealth Management-U.S. He may be reached at 425-739-1109 or andrew.kloess@rbc.com.