• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

College savings accounts lose ground

September 30, 2008 12:00:00 AM PDT
The hard times on Wall Street are cascading on families trying to send their kids to college. The market has pounded the 529 college savings accounts.Trying to afford higher education with its high price tag is turning into a financial struggle for many families. However, saving money is only going so far.

College campuses are still bustling and students still eager to get an education. But the lines at financial-aid windows are busier than ever as students scrimp to pay for fees and books.

"They gave me a voucher for $250. And two of my books was ... that was it!" said Michelle Kirk, a sociology major. "And I still need two more."

Parents who have been saving to put their kids through college have also been shocked. In recent weeks, they've seen their tax-deferred 529 college accounts lose money. And they're losing it faster than they can put money in.

Peggy Hodgson owns an antique store in South Pasadena. She's been saving for her daughter's higher education. Luckily, her daughter is just 14 years old, but her college fund is collapsing.

"Last time I checked, it lost about a third. And that, I'm sure it's lost more than that now," said Hodgson.

"Reminds you not to put your eggs in one basket," said Connie Brown, another mother.

The situation is even worse for Brown. Her son is graduating in June. He wanted to attend Art Center College of Design in Pasadena, a private school with high fees. But the 529 college fund has slipped 50 percent.

"His future is in jeopardy," said Brown, as she described what it felt like to watch the fund plummet. "I'm not sure where he's going to go to school. Private school is probably no longer an option now."

Junior colleges, as usual, are picking up the slack. Enrollment at Pasadena City College is up 5 percent this year.

"When the economy plummets, people come back to school and there's a great education here. And cheap! Twenty dollars per unit," said Mark Nordby, Pasadena City College Admissions Clerk.

The cost of education is affordable at community colleges now, but the future does not look good. While enrollment is up, community colleges and state colleges have a flat budget due to the state budget crisis. So fees will likely go up.

 

- Get more L.A. breaking news, weather, traffic and sports
- Have a news tip? Send your tips, video, or pictures


Load Comments