Whistleblower Allegations Prompt Tough Questions For Washington's Prepaid Tuition Program

Oct 2, 2017

Did Washington’s prepaid Guaranteed Education Tuition program give VIP service to state lawmakers with accounts?

“Absolutely not,” was the answer Monday from GET Coordinator Betty Lochner during questioning by a panel of state lawmakers.

Did GET staff question the personal financial motives of lawmakers who own GET credits and were proposing legislative changes to the program?

“There was no indication that had been happening,” Lochner said.

GET officials were called before the Legislature’s Advance Tuition Payment advisory committee to answer those questions, and also to address broader allegations of “gross mismanagement” made by a whistleblower in August.

Democratic state Sen. David Frockt, who doesn’t own GET credits, said the allegations “startled” some lawmakers.

“That obviously is part of the reason that we’re here having this hearing today,” he said.

The whistleblower, Michael Bennion, a former associate director at GET, also alleged that the GET program charged “unnecessarily high administrative fees” and did not properly account for that money.

GET officials have said that pricing decisions are based on an actuarial review and set by a committee that holds open meetings. But they also acknowledge that separate accounting procedures to track the fees were not put in place when the program began in 1998.

“Over time we’re trying to become … more and more transparent on where and how the fees are so any customer can understand it,” Lochner told the panel of lawmakers.

The Washington Student Achievement Council, which oversees GET, has asked the state auditor to conduct an independent accountability audit of the program.

“I think it will show that it is a well-run program, that it is priced appropriately,” WSAC Executive Director Michael Meotti said following the legislative hearing.

GET has 97,000 active accounts and more than $2 billion in assets. It’s been closed to new enrollments since July 2015 after lawmakers voted to reduce college tuition. That created a gap whereby the value of the GET credits was greater than what tuition actually cost.

The GET program recently “re-based” the value of GET credits and will reopen to new enrollees on November 1. The price per tuition unit will be $113. One hundred credits pays for one year at a state-funded college or university.

The state is also in the process of creating a 529 college savings plan that is scheduled to open next year.