Future college credit at today's prices.Program makes it possible

Karen Stermitz understands what's best for her two boys.

She knows flashy holiday gifts, whether shiny toy trucks or video games, tend to quickly lose their luster.

There's also the mantra her sons Brian and Andrew have heard hundreds of times: "Fill your head with knowledge, it gives you choices in life."

Combine those two truths, and you've got what Stermitz calls the perfect stocking stuffer for Christmas or any time: Prepaid college credits sold by Washington state's Guaranteed Education Tuition, or GET, program.

Talk about a gift that will soar in value: Qualified under Section 529 of the federal tax code, GET allows family and friends to lock in future college credits at today's prices. With in-state public school tuitions climbing an average 7 percent in Washington each year since 1981, that's no small feat.

"It really is such a neat gift. It's brilliant," Stermitz said, relaxing in her woodsy Fern Prairie home. "If you have a kid and you don't know what to give them, it would be a great surprise."

GET accounts grow tax-free and no tax is paid when money is used for tuition, room and board and other school-related expenses. They also may be used at public or private schools across the U.S. and elsewhere, transferred to another relative, or cashed in for a refund.

The flexible, fast-growing program now counts more than 68,000 accounts worth nearly $800 million. In Clark County, 1,783 families have opened GET accounts, 94 of them since 2006-07 registration opened last September.

Among older accounts are those for Brian, 17, a senior at Camas High School, and Andrew, 15, a sophomore. When the boys open their annual Christmas package from their California grandparents, they'll find another $25 GET certificate inside. Same when their birthday comes. By now, they recognize the value each slip holds.

"I basically have 212 years of college paid for already," said Brian, who is considering Central Washington and Eastern Washington universities. "I know I'm going. I just don't know where, yet."

Credits flexible

So far, each boy has accrued 179 GET "units." GET allows purchase of 500 units (100 units = one year), which covers five years of undergraduate tuition, fees and board at the state's flagship schools, the University of Washington or Washington State University.

At less costly schools such as Eastern, credits stretch even farther, accounting for Brian's two years'-plus calculation.

Karen Stermitz said two events drove home the value of locking up credits early, keeping them immune to future price hikes approved by the Washington Legislature, such as a 16 percent jump in 2002.

She found the GET program a few years back while leading the Camas school foundation. She and others raised college help for a valedictorian student with few resources. While cash scholarship and other gifts sprung to mind, a little research showed the great value of GET credits, she said.

Not too late to start

Ever since, Stermitz has urged parents, grandparents and even working high school students to tuck all they can into GET, if only $10 or $20 per month. The investment return will outstrip most alternatives, including that old standby, the "college savings account" that earns nominal interest easily trumped by tuition hikes.

GET funds may be accessed just two years after deposit, so it's not late to start, even after students have begun college, she adds.

The sharp U.S. stock market decline in 2000 also taught the Hewlett-Packard marketing manager the precarious nature of financial investment.

"That was an eye-opener to me," Stermitz said. "I don't want that vulnerability for a college education. You never know what can happen. Even if everything falls apart, (with GET) you have an education in the state of Washington."

Congress recently cemented GET's tax-free status. Just as important, accounts are now firmly considered an asset of parents or guardians and not the student, preserving students' ability to qualify for college financial aid.

One of 18 prepaid state plans, the Washington version locks in guaranteed college credits at the time of purchase, no matter their eventual price. There's no fretting over how an investment portfolio performs over time, a factor in private-sector 529 college plans.

"It's a peace-of-mind program," said Whitney DalBalcon, GET spokeswoman in Olympia. "You have the certainty of knowing you'll have enough when your child is ready for college."

After some toying around, Brian Stermitz has focused on school and his grades, as his plans grow more certain. A skilled musician, he's inclined to pursue political science at college next year, he said.

"It comes naturally to me," Brian explained. Like any smart politician, he now grasps the benefit of early GET investment, he said. He predicts other young students will, too, once they learn the lasting value of an unassuming GET certificate. "They won't appreciate it until they're older," he said.