WASHINGTON — The global financial crisis that has shaken retirement accounts and stock portfolios has claimed yet another casualty: college savings funds.

WASHINGTON — The global financial crisis that has shaken retirement accounts and stock portfolios has claimed yet another casualty: college savings funds.

Many 529 college savings plans across the country have posted losses this year, forcing families whose children are close to college to reconsider their strategies.

The state-sponsored savings plans take contributions from parents and spread them among a variety of investments such as stocks, bonds and money markets.

Boston-based Financial Research found that, as of the second quarter, the value of 529s declined 7.6 percent, according to preliminary figures from its survey of asset managers.

Most of Virginia's 19 portfolios have posted losses this year, from as little as 2 percent to as much as 30 percent.

"This has clearly been a challenging environment for the past year, really, so performance has not been what we would have liked or what we have seen historically, but I think it's consistent with the rest of the market," said Mary Morris, executive director of the Virginia College Savings Plan.

The plans have gained in popularity over the years, holding $110 billion in assets in the second quarter, according to Financial Research. Parents have flocked to them because they offer potential growth while providing tax-free earnings. The trade-off, however, is that they can quickly dwindle if they are exposed to stocks during an economic downturn.

Public relations executive Paul Nathanson, of Burke, Va., has a 529 plan for each of his two daughters. One is 15, the other is 11. He'd had enough in his older daughter Rachel's fund to put her through four years of an in-state college, but as of Sept. 30, even before the record stock market declines this month, Rachel's fund was down 12 to 13 percent.

"The 529 plan I have is not going to pay for four years of college, especially now," he said. "I realize that I'm going to have to find money elsewhere."

Nathanson acknowledged that he is lucky compared with others. In the next two years, the market could turn around and he could recoup what he lost and then some, he reasoned.

That's what financial advisers are telling their clients. Pulling money out now would lock in the losses. Furthermore, as with 401(k)s, there are tax penalties for withdrawing money from a 529 for anything other than the original intent. The money becomes taxable income, and you pay a 10 percent penalty.

"We remind people that investments for college are meant to be for the long-term," said John Trader, public relations and marketing manager of the College Savings Plans of Maryland. "It's important to stay the course."

A majority of parents have age-based plans. The younger the child is, the more money is invested in equities, up to 100 percent under some plans. Every couple of years, the money shifts to more conservative investments. The closer the child gets to college, the more money is invested in bonds and the like.

"If your child is 4 or 5 years old, you can think about changing your investment strategy, but the markets run in cycles and you have time," said Douglas Chittenden, vice president of product management for TIAA-CREF, which runs many 529s. "But if you have an older child and you are using the money to pay a bill soon, you might consider rebalancing."

In recent months, fund managers have noticed an uptick in the number of parents shifting to safer investments. Typically, Chittenden said, 20 or 30 people rebalance their TIAA-CREF portfolios in a given week. Two weeks ago, 700 people rebalanced, he said.

But a number of parents are running into a hurdle: an Internal Revenue Service rule that limits asset reallocations to once a year. Now many parents who have already rebalanced are stuck, and the College Savings Plan Network, which represents state 529 officials and fund managers, is thinking of asking for semi-annual or quarterly changes.

"Because the market is down, you've got a lot of parents that are nervous that their assets are in a portfolio that is not as conservative as it should be," Trader said.