Saving for college is one of the most impactful ways families can invest in a student’s future, and starting early can make the journey much more manageable. In a recent episode of Countdown2College, Gage spoke with Kristin Ageton, director of college access at EducationQuest, about how 529 College Savings Plans work, why they matter, and how families can use them to prepare for future education expenses.

What exactly is a 529 Plan?

A 529 Plan is a savings and investment account specifically designed to help families save for education expenses. Kristin explained that these accounts are “tax-advantaged,” meaning families can receive certain tax benefits while allowing their savings to grow over time through investments. In Nebraska, the state’s plan is called NEST 529, which stands for Nebraska Educational Savings Trust.

How is a 529 different from a regular savings account?

Unlike a traditional savings account that earns a small amount of interest, a 529 Plan allows families to invest their money into portfolios that can grow over time. Some options are more aggressive when students are younger and become more conservative as college approaches. While investments can fluctuate, the long-term growth potential is one of the biggest advantages of using a 529 Savings Plan.

Why does compound interest matter so much?

One of the biggest benefits of starting early is compound interest. This means families earn money not only on the amount originally invested, but also on the earnings that build over time. Kristin shared that even small contributions can grow significantly over the years, especially when families stay consistent and think long-term.

What can 529 funds pay for?

Many families think 529 Plans only cover college tuition, but the funds can be used for much more. Eligible expenses include books, supplies, room and board, apprenticeship programs, and even some student loan repayment costs. Certain K-12 tuition expenses may also qualify, depending on the situation.

Who can open and use a 529 Plan?

529 Plans are more flexible than many people realize. Any adult over 18 can open and manage an account, and the beneficiary can be a child, grandchild, relative, mentee, or even the account owner. Kristin also explained that beneficiaries can be changed later if plans shift, making these accounts useful for multiple family members over time.

What are some simple ways families can grow their savings?

Families can build their savings little by little in several ways, including:

• Setting up automatic monthly contributions.
• Asking family members to contribute rather than giving traditional gifts.
• Starting with small deposits, even as little as $10 a month.
• Using online contribution tools to allow relatives and friends to help save.

Small, consistent contributions can add up much faster than you might expect.

What happens if plans change in the future?

One common concern families have is what happens if a student changes schools, delays college, or decides not to attend at all. Fortunately, 529 Plans offer a lot of flexibility. Funds can usually be used at accredited schools across the country, beneficiaries can be changed, and some unused funds may even be rolled into a Roth IRA under newer rules.

Is it ever too early or too late to start?

According to Kristin, the best time to start saving is whenever you’re able to begin. While starting early allows savings to grow faster, families with older students can still benefit from the tax benefits and growth opportunities a 529 Plan provides. Whether you’re saving for a young child, a teenager preparing for college, or even your own education goals, every step toward saving can help create more opportunities for the future.

Our final tips for saving for college!

Saving for college does not have to happen all at once. Even small steps can help families feel more prepared for future education expenses. Taking time to research options, ask questions, and create a consistent savings habit can make college costs feel more manageable. The most important thing is to get started and build toward future goals one step at a time.