State-funded college savings programs are feeling the impact of the economic downturn, with the declining stock market shrinking the value of investment-based savings plans.
Wisconsin's EdVest and Tomorrow's Scholar programs, which are investment plans that offer tax advantages to encourage saving for higher education, have fallen 8.4 points or $181 million in the last quarter, according to the Associated Press.
Megan Perkins, program director for the Wisconsin College Savings Program, said some of this drop is due to the decline in the stock market but is also the result of parents taking out money to pay tuition bills in August and September.
While we have lost some money with the market not doing well in the last quarter, that percentage [reflects] not just that,"" Perkins said.
According to Jacob Stampen, UW-Madison professor emeritus of educational leadership and policy analysis, parents and students who invested in the program are currently losing money.
He said the economy will recover, but it may take a long time to do so, and accounts such as EdVest and Tomorrow's Scholar may not be very popular in the near future.
""This current economic crisis is just blowing a hole in a lot of things,"" Stampen said.
