Editorial: As Student Loan Debt Rises, NEST 529 Shines

  • September 17, 2026
  • Lincoln, NE

By Rachel Biar
Nebraska Deputy Treasurer for Savings Programs

 

Today, approximately 42.6 million Americans hold $1.7 trillion in federal student loan debt, with millions more carrying private loans. You read that correctly – $1.7 trillion.

September is National College Savings Month. It’s an opportunity to highlight important tools that help families reduce the financial burdens that often come with education after high school.

This year, the Nebraska Educational Savings Trust (NEST 529) is marking its 25th anniversary. Since its launch in 2001, NEST 529 has grown to more than 300,000 accounts with $8 billion in assets. Administered by the Nebraska State Treasurer's Office, NEST 529 has one of the nation’s highest participation rates and continues to earn a Medalist Rating from Morningstar.

Nebraskans can celebrate thousands of success stories made possible by families who planned ahead. While NEST 529 continues to evolve with Nebraska’s changing education system and workforce needs, its mission has remained constant: helping families prepare financially for education and life beyond high school.

As we enter NEST 529’s next quarter century, we know that planning and saving will play an even more important role in preparing for higher education and vocational training.

 According to the College Savings Foundation’s 2026 Survey, 71% of parents anticipate taking on some debt to pay for their child’s education, including 46% who expect to use education loans. With that in mind, here are six reasons to consider opening a NEST 529 account today:

 

  1. Long-Term Growth. Even modest, consistent contributions can grow over time. Starting early gives those savings more time to grow and can reduce reliance on loans.

 

  1. Tax Advantages. Earnings grow tax-deferred and withdrawals for qualified education expenses are tax-free. Nebraska account owners may qualify for state income tax deductions of up to $10,000 per year ($5,000 if married and filing separately), making NEST 529 a smart, tax-advantaged way to save for higher education.

 

  1. Flexibility. NEST 529 funds can be used for tuition, fees, books, supplies, housing, and more. Accounts can be transferred between beneficiaries, so families can adjust as circumstances change. NEST funds may also be used at eligible public and private colleges and universities, community colleges, trade and vocational schools, registered apprenticeships, graduate school, and even for recognized credentials and certifications for skilled trades.

 

  1. Generational Support. Grandparents, relatives, and friends can contribute to a child’s account, turning birthdays and holidays into opportunities to invest in a child’s future rather than buying short-lived gifts.

 

  1. Debt Prevention. By building savings in advance, families reduce the need to borrow. Every dollar saved today is a dollar not borrowed tomorrow. Families also may use NEST funds to repay qualified education loans, subject to a $10,000 lifetime limit per individual.

 

  1. Minimal Impact on Financial Aid Eligibility. A parent-owned NEST account is treated as a parental asset for federal financial aid purposes, rather than as a student asset. Distributions from 529 plans owned by a grandparent, aunt, uncle, or other non-parent are no longer reported as student income when applying for federal financial assistance.

 

At a time when student loan debt is limiting the future of too many Americans, tools that reduce borrowing can provide a smoother path ahead. NEST 529 offers families a practical, flexible, and forward-looking way to reclaim control over how they pay for education. It’s one of the smartest ways to prepare for education and career training, whatever that looks like in the future.

Visit NEST529.com to learn more, including answers to frequently asked questions.

 

###

 

Rachel Biar is Nebraska’s deputy treasurer for savings programs. She has served the Nebraska State Treasurer’s Office for more than two decades.

  • Jamie Karl
  • 531-427-1752
Facebook
X (formerly known as Twitter)
Linkedin