Liquidating the account means turning paper losses into real losses. What's more, when the market rebounds after a bear market, most of the gains tend to come in the first few months of the recovery. So by cashing out, you risk the chance of missing the ride back up. Don't panic: Don't make sudden changes to a 529 just because it's lost money. If your account has an appropriate allocation strategy for your situation, you likely are best off continuing to contribute on a regular schedule and waiting for things to turn around.