The rising cost of tuition has moved higher education out of reach for many families. Students are increasingly graduating with significant amounts of debt. In 2011, 63% of Nebraska’s college students graduated with debt averaging $24,284. These trends have made savings for higher education significantly more important.
While attaining higher education is good on an individual level, it also impacts a state’s ability to create a well-educated, workforce-ready population. By 2018, a projected 66% of Nebraska jobs will require post-secondary education. In 2011, 37.6% of Nebraskans over twenty-four years old had some sort of post-secondary degree.
Research suggests that having an educational savings account has a positive effect on children’s college progress, even when other factors impacting college success are controlled. These findings suggest that an educational savings account can increase the likelihood of both seeking and completing a post-secondary degree.
Nebraska is currently under-utilizing existing 529 educational savings accounts. Senator Hadley introduced a bill (LB 296) which encourages more families to participate in 529 educational savings accounts. The bill will be heard by the Revenue Committee on Friday, Feb. 1.
Voices for Children supports the bill. We hope that the legislature will also consider additional options of continued support for lower income families to save.