COVID-19 has affected the way Americans live, work, eat, shop, and earn money. It's the latter that has a lot of people worried, what with unemployment levels reaching record highs and so many people struggling financially.

The stock market has taken a beating as well since COVID-19 cases started popping up in droves, and while things have improved somewhat following a very rocky March, portfolio values are still very much down across the board. And by "portfolio values," we're talking brokerage accounts, retirement plans, and college savings.

Girl with serious expression in front of chalk board


Some people use a traditional brokerage account to save for college so they have freedom as to how that money is used, but many families take advantage of 529 plans, which allow money to grow tax-free for education purposes. No matter where you've been housing your college savings, there's a good chance you're looking at less money today than you were three months ago. Here's what to do about it.

If you're years away from paying for college

Right now, a lot of investors are being told to sit tight, leave their portfolios alone, and wait for the stock market to stage a comeback. If your oldest child isn't even in high school yet, it pays to do the same. The stock market has a strong history of recovering from downturns, and there's no reason to think this situation will be different, so before you panic, recognize that there's no need to take action just yet when you won't be writing out tuition checks for many years.

If you're close to paying for college

It's easy for parents who are nowhere near college to stay calm in light of the recent market downturn. But if you have a high school junior or senior, you may be more worried, and understandably so.

That said, depending on how you're saving for college, the hit to your portfolio may not be that bad. If you have your money in a 529 plan, there's a good chance you're invested in a target-date fund that's designed to shift toward safer assets, like bonds, as your child's college start date draws near. As such, you may find that your savings are mostly intact.

If that's not the case, you may need to adjust your plans, whether that means limiting your child to a less expensive college or having your child take out student loans to compensate for lost savings. Of course, neither is ideal, but if you're really on the cusp of college and your 529 plan or brokerage account is down in a very big way, there may be no way around it. The good news is that federal student loans make borrowing relatively affordable, and they come with protections that make paying them off easier.

Unfortunately, no one is immune to the economic impact of COVID-19. If your college savings have lost value, don't despair if that milestone isn't happening just yet. And if you're close to college, be flexible. If there's one thing the pandemic has taught us, it's that things don't always go according to plan, and the better we roll with the punches, the more resilient we stand to emerge.