In recognition of National 529 College Savings Day, Nebraska’s NEST 529 College Savings Plan released the results of its 2019 College Savings Survey. The survey covered an array of topics to better understand Americans’ behaviors, attitudes and priorities as they relate to college savings.
The study found that 57 percent of Americans are either unfamiliar with or do not know what a 529 college savings plan is. In addition, 54 percent of respondents report it is very likely or somewhat likely they or their child will have to take out student loans to pay for their child’s higher education.
“As the cost of higher education continues to rise, so too does the importance of building and strengthening one’s financial health by way of savings,” said Nebraska State Treasurer John Murante, Trustee of NEST 529. “Being familiar with the many advantages of 529 college savings plans—such as the associated tax-advantages—empowers people to make well-rounded decisions when it comes to financing their future academics. I hope that individuals and families take advantage of National 529 College Savings Day, and can use it as an opportunity to not only spark but continue the conversation surrounding how to pay for college.”
Among the study’s additional findings:
The most common methods parents use or plan to use to pay for their child’s higher education include:
- Financial Aid (50.37 percent), Scholarships (47.67 percent), Personal Savings (42.01 percent), Student or Parent Loans (39.80 percent) and a 529 College Savings Plan (12.71 percent).
- 51 percent of respondents feel a combination of the child and the parent should be responsible for paying for the child’s higher education.
- 39 percent of respondents report they are currently facing student loan debt from either their own, a spouse’s or their child’s higher education.
- 51 percent of respondents agree or somewhat agree that it is difficult to balance saving for retirement with contributing to a higher education savings plan.
- Respondents attribute the reasons why they do not invest in a 529 plan to being preoccupied with paying off current debt (16.41 percent), high costs of living (13.57 percent) and the utilization of other savings methods (11.01 percent).
- 76.85 percent of respondents have never contributed to a 529 plan.
“It’s imperative to start college savings as early as possible in order to meet the costs of higher education without taking on overwhelming and costly loans,” said Deborah Goodkin Managing Director, Savings Plans, First National Bank of Omaha. “The results of this study underscore the necessity of this national awareness day, and signal the need for a much larger national discussion. Every child should have access to the school that is right for them, and financial preparedness is an essential solid foundation for their bright academic futures.”
NEST 529 is a tax-advantaged 529 college savings plan and provides four plans to help make saving for college simple and affordable: NEST Direct College Savings Plan, NEST Advisor College Savings Plan, TD Ameritrade 529 College Savings Plan, and State Farm 529 Savings Plan. The Nebraska State Treasurer serves as Program Trustee. First National Bank of Omaha serves as Program Manager, and all investments are approved by the Nebraska Investment Council. Families nationwide are saving for college using Nebraska’s 529 College Savings Plans, which have more than 264,000 accounts, including over 85,000 in Nebraska. Visit NEST529.com and treasurer.nebraska.gov for more information.