Bill allowing NEST account payments for student loans advances

LINCOLN, Neb. -- Nebraska Educational Savings Plan Trust accounts could be used to repay student loans under a bill that advanced this week in the Legislature.

Under current law, the accounts may be used to pay a beneficiary's qualified higher education expenses.

Under LB864, introduced by Sen. Tim Gragert of Creighton, they also could be used to pay the principal and interest on the qualified education loan of a beneficiary or the beneficiary's sibling.

The bill would cap aggregate total payments at $10,000 per person.

Gragert said the best use of the 529 funs is spend them up front and avoid taking out student loans. Some families, however, have leftover 529 funds that they would like to use to pay off student loans, he said, stating that LB864 would allow them to do so.

LB864 advanced to select file on a vote of 40-0.