So it looks like all that legislative and editorial handwringing over the solvency of the state's pre-paid tuition program, the Guaranteed Education Trust, turned out to be for naught, what with the State Actuary's report (PDF) today that that the GET program in its current form has only a 0.7 percent likelihood of insolvency over the next 50 years.
In fact, one of the more interesting observations in the report is that "solvency results are very sensitive to changes in assumed purchaser behavior," meaning that changes to the program, like say, reduced benefits, that lead to lower participation, could actually increase the chance of insolvency over the long run.
The key to maintaining solvency, according to the report is to price future GET units with an accurate "long-term tuition growth assumption," which, it turns out, is pretty much what I described last week in suggesting that our state "Lawmakers Don't Seem to Get GET":
So I say we should just stick with what we have, and let the fund's actuaries reprice the cost of buying into the program to reflect the new reality of annual double-digit tuition inflation.
But I'm just some dumb blogger, so what do I know? Still, if lawmakers are still concerned about the state's potential liability, they might want to come up with a long-term policy toward tuition, instead of just winging it from year to year.
Oh, and one more tidbit. GET's actual investment returns between June 30, 2010 and February 28, 2011? 18.35 percent. Not too shabby.