By Rachel Biar, Assistant Nebraska State Treasurer for the NEST 529 Savings Plans & Vice Chair of CSPN

September 15, 2020

It’s no surprise that higher education comes with a hefty price tag and rises every year. However, with the proper planning and resources, it is possible for your loved ones to be able to pursue their hopes and dreams, without having to worry about the negative impact on their financial futures.

Whether your child is a newborn, in elementary or high school, it is never too soon — or too late in the game — to start saving for higher education. The key to success? Having a plan in place and saving as early and as much as possible.

According to the recent national NEST 529 College Savings Survey, the most common methods parents use or plan to use to pay for their child’s higher education include: scholarships (47.67%), personal savings (42.01%), student or parent loans (39.80%) and a 529 college savings plan (12.71%).

Let’s break down some of these common savings strategies:

  1. 529 College Savings Plan

Due to their many benefits, 529 college savings plans are an excellent way to save for college. Savings in a 529 account grow free from federal income tax, and withdrawals remain tax-free when used for qualified higher education expenses like tuition, room and board, fees, books, supplies and equipment required for enrollment.

For those who have 529 plans for their loved ones, you are already ahead of the curve, and I encourage you to keep contributing early and often. For those who have not already done so, it is never too late, so take a look at your options today.

  1. Scholarships

Contests, giveaways, or academic and sports scholarships are all great ways to provide a boost to your savings efforts. However, it’s important to incorporate this as one part of your holistic saving strategy, rather than relying solely on the prospect of a potential scholarship, as the criteria for eligibility is often very selective and not always guaranteed.

When researching scholarship options, do not forget to check with your 529 college savings plan. Many 529 state plans offer sweepstakes and giveaways throughout the year for account owners, so keep a running calendar of deadlines and apply accordingly. Additionally, be on the lookout and apply to any and all niche scholarships that you can find — while these may offer less than that of larger scholarship opportunities, every little bit counts and pays off in the long run!

  1. Student or Parent Loans

According to the survey, 54% of respondents say it is likely or somewhat likely that they or their child will have to take out student loans to pay for their child’s higher education, and 51% feel a combination of the child and the parent should be responsible for paying for the child’s higher education.

Student or parent loans often come with high interest rates, which only increases the amount you have to pay back on top of what you’ve already borrowed. While the best way to avoid having to take on loans is to develop a plan and save early and often, in the scenario where you need to take out a loan, make sure to do your research to find one with a low interest rate, and a payment plan that works best for you.

When it comes to who pays for college — whether it be a child, parent, or a combination of any/all, I encourage families to have an open dialogue and develop a strategy that suits their unique goals and abilities. A great way to help make this a collaborative effort is to encourage family members and friends to contribute to your child’s college savings in lieu of or in addition to gifts for holidays, birthdays, baby showers, graduations and other special celebrations. After all, the gift of an education will never go out of style!


Always keep in mind that there is no ‘one size fits all’ approach or perfect algorithm when it comes to planning for higher education. While many families throughout the course of their lives may face times of economic uncertainty and financial struggle, I encourage all families to continuously prioritize higher education savings and planning, and I look forward to the academic successes and bright futures of your loved ones.


About the Author

Rachel Biar is the Assistant Nebraska State Treasurer for the NEST 529 Savings Plans. She serves as Vice Chair of the College Savings Plans Network Executive Board and Chair of the Membership Engagement Committee. Visit and for more information.