Stock market costs Colorado parents college money

DENVER – Parents who thought they'd found a safe way to invest in their children's educations are finding that the stock market is making even educational investments risky.

“We have gotten calls,” said College Invest Chief Marketing Officer Jennifer Robinson.

College Invest is a non-profit division of the Colorado Department of Higher Education. Parents can use a tax-deductible 529 plan to save for their children’s college education.

Some parents choose heavier stock options in their plans, making them more vulnerable to the downturns on Wall Street.

Robinson says parents who have lost money and have teenagers who are getting ready to go to college may want to consider switching their portfolio.

“We also, within our program, offer very conservative portfolios, like a money market,” she said. “In a down time like this, parents should be considering what are those more conservative portfolios if my child is older and going to college.”

Robinson likens College Invest to a 401k. Parents who are saving for very young children can choose more aggressive portfolios and be less skittish during economic downturns.

“If time is on your side, the best thing is to let it sit in there. This is a long-term investment,” she said.

College Invest does not charge any penalty fees for changing a savings or investment portfolio. The case is different for parents who may choose to withdraw all of their contributions.

“We can walk them through what the consequences are for a non-qualified withdrawal,” said Robinson.

For parents hoping to help their child get a student loan for college, Robinson says federally funded loans, so far, haven’t been impacted by the financial crisis.

She does advise parents and students to start doing their homework on different sources of funding.

“If you’re in high school, I would go speak to the counselors,” she said. “If you’re in college, I would visit the financial aid department.”

Robinson notes that for many middle- and low-income families, College Invest offers a matching grant program.

“We will match their contributions, dollar for dollar, up to $500 per year, for five years” she said.

Officials with College Invest also advise parents who have financial advisors to speak with them about how saving for a college education may fit in with their retirement plans and other investments.

For more information on College Invest, log on to www.collegeinvest.org.