College savings plans tumbled 21% in 2008
As college costs continue to soar, Americans who had been smart and fortunate enough to put aside money to cover college expenses have seen the value of that 529 Plan fall by $23.4 billion over the past year -- a decline of some 21%. This comes as college tuition prices rose another 5.6% over the last year, leaving families with a pretty big problem: less money to pay for something that is more expensive.
For precociously financially savvy families with young children, these declines aren't such a big deal -- annoying but there's enough time left that they don't have any immediate impact on college affordability. For families with high school students though, these declines can be a disaster -- especially when home equity is no longer available to tap into for college expenses, retirement portfolios are in the toilet, and that annual bonus isn't as good as it used to be.