Author: Rachel Biar, Assistant State Treasurer

Ah, May. What’s not to love about the first glimpse of warm weather and blooming flowers, Memorial Day weekend and the start of graduation season?

Here at NEST, the month of May takes on a special meaning as we eagerly turn the corner toward National 529 College Savings Day – a day dedicated to raising awareness about the importance of preparing for the costs of higher education. In the spirit of educating families like yours about the value of saving in a 529 plan, we’re here to address a few popular misconceptions, providing you with a solid foundation of understanding on which to build a successful financial future.

Myth: Saving with a 529 plan will negatively impact my child’s chances of receiving financial aid. So, what’s the point?

Fact: A 529 Plan owned by the parent or student will be treated as the account owner’s personal asset on the FAFSA, but the impact is limited. Only a maximum of 5.64% of parental assets are counted on the FAFSA. Learn more about 529 plans and FAFSA here.

Myth: My child will likely receive a merit-based or athletic scholarship, so they will not need savings from a 529 plan.  

Fact: Scholarships often only cover tuition, while funds from 529 plans can be put towards a variety of qualified higher education expenses—from textbooks, to required classroom technology, to room and board. These fees aren’t cheap and can add up quickly.

Myth: My income is too high or too low to contribute to a 529 plan.

Fact: Anyone can open a 529 savings plan and make regular contributions, regardless of income level.  Plus, the NEST 529 Plan does not have a minimum contribution amount. Additionally, NEST 529 offers automatic contributions to all account owners, a seamless and pain-free way to regulate your contributions with no amount per month being too high or too small. Learn more about automatic contributions here.

Myth: My 529 funds can only be applied towards traditional four-year colleges and universities.

Fact: The money saved through a 529 account can be used to fund higher education costs at any eligible institution, including out-of-state and some international schools. The qualifying programs are diverse and include two- and four-year public and private colleges, graduate and professional programs, vocational-technical schools and more. You can search for eligible educational institutions at the Federal Student Aid (FAFSA) website.

Once the myths are debunked, it’s clear that 529 plans aren’t scary at all—and in fact, the perks may be better than you imagined! For those who have not yet opened an account, or if you have but aren’t regularly contributing, what is stopping you? The time is now to dispel any misconceptions that have prevented you from preparing for the financial future. Higher education may seem far off in the future, but it’s never too early to have a plan in place, so that the ones you love most can receive the education necessary to make their own special mark on the world. 

For more information on saving with NEST 529, visit