As Wall Street hit the skids in the second half of last year, Pennsylvania parents looking for a safer haven for their college savings funds poured $102 million into the state's $1 billion Guaranteed Savings Plan. Enrollment jumped 26 percent, as 3,500 new investors joined the plan.

Now, those parents are left wondering just how safe their money is.

The fund, which allows investors to purchase tuition credits at today's prices and redeem them in the future, had a $328.7 million deficit at the end of 2008, leaving it 75.5 percent funded. That means that in the unlikely event that every investor who has purchased credits cashed them in today, they would only receive 75.5 cents of tuition for every $1 they purchased.

"It would definitely give me pause if I was contributing to it," said David Root Jr., CEO of D.B. Root & Co., a Downtown investment manager.

Compounding investor anxiety is the fact that the "guarantee" goes no farther than the money in the fund; state taxpayers are not obligated to make up any shortfall. The plan's materials make that clear, but state Treasurer Robert M. McCord is worried some investors could have the wrong impression.

"My fear is that the very name ... could mislead savers into believing that the plan is guaranteed by the Commonwealth," Mr. McCord told members of the House Appropriations Committee last month.

Other states with prepaid tuition plans also are weighing how to address growing deficits. Alternatives include closing the plans to new investors, placing a surcharge on new investments or providing funding through other sources.

Pennsylvania imposed surcharges on its guaranteed plan in 2003, after a three-year market decline left the fund with a $52.6 million shortfall. The surcharges meant investors had to contribute slightly more than $1 to buy $1 worth of tuition. They were eliminated in 2006 after Wall Street recovered from the last bear market.

"I would almost bet the world they would do that again in light of what's going on," said James Holtzman of Legend Financial Advisors in McCandless.

The 30 percent-plus drop in major market indexes over the last nine months has slammed most investors, and state prepaid tuition plans are no exception.

Alabama has closed its prepaid plan to new investors and is considering supporting the underfunded plan through legislation. The plan had a $306 million deficit as of Sept. 30, leaving it 67 percent funded.

Plans in two other states had shortfalls going into the market slide.

West Virginia's prepaid tuition plan, which was closed to new investors in 2003, had a $17 million deficit at the end of the June 30 fiscal year. That left it 85 percent funded vs. 98 percent funded at the end of the previous fiscal year. The state can transfer up to $1 million annually from its unclaimed property fund to support the tuition plan.

Kentucky's prepaid tuition plan was 80 percent funded as of June 30. That left it with a deficit of nearly $36 million, compared to a $14 million deficit a year earlier.

By comparison, Pennsylvania's guaranteed plan was funded 94.5 percent at June 30 and 86.1 percent as of Sept. 30.

The prepaid plan isn't the only option Pennsylvanians have for so-called 529 college savings plans, which give investors federal tax advantages if the money invested is used for college expenses. Pennsylvania also allows a state income tax deduction for contributions to any 529 plan, even if it is sponsored by another state.

In addition to the guaranteed plan, Pennsylvania has a 529 Investment Plan, which offers more than 20 portfolios that invest in Vanguard mutual funds. A few of the more conservative of those options had positive returns in the first quarter, but more aggressive portfolios lost up to 12 percent over the period and were down more than 40 percent over the last year.

Based on the $932 million in the guaranteed plan as of Feb. 20, Treasury officials say there is enough to fund projected withdrawals over the next eight years. That provides some comfort for investors whose children are at or near college age. Financial advisers say parents of younger children should consider other options.

"If the current deficit grows to be too large, the state will need to make some difficult decisions," said Matt Yanni of Yanni & Associates Investment Advisers in Franklin Park.

Robert Nusbaum of Middle America Planning in Mt. Lebanon said conservative investors should consider a more conservative options under the state's 529 Investment Plan. He has never recommended the guaranteed plan and said he feels "more strongly than ever that it is not the best choice for saving for college."