As the saying goes, a mind is a terrible thing to waste. And as many parents are discovering in the wake of the 2008 crash, so are years of savings for their kids college.

Sponsored by states and pushed by brokers, 529 plans were supposed to be the best way for parents to handle the rising cost of college tuition. Every state is different, but parents usually receive a tax break for contributions with their state s plan; the money is then invested and grows tax-free, and withdrawals for tuition aren t taxed either.

But now many parents are discovering that the investments were much riskier than advertised even in the options for older teenagers. The most popular funds in 529 plans are age-based portfolios, prepackaged investments designed to get more conservative as college gets closer. Problem is, many of them didn t get conservative enough. Experts have long suggested that if you plan to use your savings in three to four years, you should get it out of the market. But the average fund for high school juniors and seniors had about 25 percent of its assets in stocks. Some went as high as 71 percent. That means some parents, in plans offered by states such as Ohio, Rhode Island and North Carolina, lost 25 percent or more. Sorry, Junior.

At this point brokers, who account for about half the 529 plans sold, can offer only cold comfort. The fund managers at Alliance Bernstein, who designed Rhode Island s stock-heavy plan, say their plan would have helped parents beat inflation in a normal market. But critics say there s a larger lesson here: When college is a year or two away, plans should significantly reduce the risk. And as we ve reported 529 plans in Utah, Ohio, Virginia and other states are offering CDs and FDIC-insured options to help risk-averse parents do just that. Karin Maloney Stifler, a financial adviser in Ohio, says that for a 17-year-old, a big allocation to stocks is appropriate only if you ve got a client willing to gamble.

And keep an eye on your broker. Some are paid to sell certain plans, so shop around for the best offerings, or at least ask a lot of worst-case scenario questions. The homework can begin at Savingforcollege.com, which lists all the state plans.

529 Homework

Morningstar
The independent mutual fund research firm looks at asset allocation, underlying funds and even individual holdings. Look for the annual Best/Worst list, out in the spring.

Collegesavings.org
Sponsored by an affiliation of state treasurers, the site explains plan features and allows parents to compare plans side by side.

Your state government
Every state has a Web site devoted to its 529 plan that usually lists investment choices, performance and how-to-buy information. Searching the Web for your state and 529 plan will get you there.