Senator Eliot Shapleigh - El Paso, Texas

Terri Strawn, flanked by daughters Haley (left), 15, and Kristin, 17, says the economy has made her nervous about her teenagers' college savings: 'We are going to feel the pinch.'

The rocky economy makes Terri Strawn nervous.

For nearly two decades, Ms. Strawn and her husband have built up and felt safe about their daughters' college-savings funds.

Then the recent economic turmoil struck and questions whirled.

Do we have enough funds to pay our youngest daughter's tuition, she wondered. Do I need to start working full time to help pay for college, she asked herself.

"We are going to feel the pinch," said Ms. Strawn, a mother of two teenage daughters in Plano schools. "Honestly, we will be fine. It may be a while, but it will come back."

For privacy reasons, she declined to talk about financial details of the family college funds.

But the news can't be good.

The current economic crisis that sent investments, pensions and savings plummeting has also put a dent in college-tuition funds. The extent of the damage depends on the types of investments, financiers say, but parents face tough questions: Should their kids go to community college first to save money? Should a high school student look closer at a cheaper public school over a private college?

"There is no doubt that the volatility of the stock market has impacted all 529 plans," said Doug Chittenden, an executive at TIAA CREF, one of the nation's big financial services companies. "If the market goes down another 10 to 15 percent, that's another 10 to 15 percent they don't have."

Financial experts say parents with students about to enter college or already in college should be most worried about their investments. A sudden decline in investments now may not be recoverable before a college student graduates, experts say.

That means parents may be forced to take out loans.

Bobby Drake knows student loans may be inevitable. A parent of two girls in Plano schools, he said he's saved enough money to pay for his 18-year-old daughter's college education.

But he isn't so sure about his youngest daughter, a ninth-grader at Williams High School. In fact, he's too afraid to check his current college-savings balance.

"I'm scared of what I might see," Mr. Drake said. "I'm keeping my fingers crossed."

The drop in college-savings values comes at a time when fewer parents are saving enough – if any – for their child's college tuition, according to a College Savings Foundation study released last month.

The foundation, which advocates that families take out education-savings plans, surveyed 800 parents nationwide and found that 43 percent of the respondents had saved no money for college.

That number is alarming, said Kevin McMullen, the foundation's chairman.

"What we found is that parents are saving less this year compared to last year and more parents are saving nothing at all," he said. "We think there needs to be a wake-up call."

In Texas, the number of residents who own state-sponsored 529 plans increased by nearly 1,000 in the last five months, according to the state comptroller's office, which oversees state plans. In late August, 19,413 residents owned a Texas-sponsored plan, such as the Texas Tomorrow Fund. The state comptroller unveiled Texas' newest savings option, a prepaid plan called the Texas Tuition Promise Fund, on Wednesday.

Despite the current economic crisis, financial experts say parents shouldn't remove money from college-savings plans.

"To the extent possible, it's in a family's interests to keep funding their college savings the best they can," said Mr. Chittenden with TIAA CREF.

Experts say parents need to check their investments regularly. If a child is about to enter college or is already there, experts say, perhaps it's time to change plans to short-term, secure investments.

Parents who own newly created plans that are heavily invested in stocks have seen the biggest drop in values. Those parents should stick with their plans because now might be a good time to buy while the market is low, said Rocky Granahan, an executive for 529 plans at Oppenheimer Funds, which manages two Texas-sponsored 529 plans.

"Now is the time to take advantage of some of the dips so that when the market does rebound, you've already participated," she said.

Although 529 plans offer many different options to manage investments, most parents select an age-based plan, financiers said. In those plans, early investments are aggressive with stocks, and when a child enters college, those plans automatically change to investments in safer money-market funds.

Since the market took a nosedive, Ms. Strawn has moved her college-savings investments into more liquid assets that will be guarded from market fluctuations, she said.

For now, she is confident the family has saved enough to pay for her oldest daughter's college tuition. But funds might be stretched in four years when she is a senior in college and her younger sister is a freshman.

"Hopefully, we'll have both daughters fully funded then," Ms. Strawn said.