Sending your kids back to school evokes many emotions: anxiety, a sense of freedom – and if you've got kids in college – apprehension about how you'll pay the bills.
Between scholarships, grants and student loans there are many aids to help families afford college expenses or private school. But sometimes it's not enough. The aid you're offered may cover all the costs, and families with higher incomes may not qualify for any assistance at all. Even if your student is getting a scholarship to help with tuition, there are other costs, like room and board, books, lab fees and other materials.
The good news is you may have access to more money than you think to close the gap.
Have you considered using home equity to help pay for college?
A home equity line of credit, or HELOC, can help you close the tuition gap by giving you flexible access to your home's equity at an interest rate often much lower than that of a traditional credit card.
The interest charged on a HELOC may be tax-deductible (consult with your tax advisor), and with a HELOC you have the added convenience of making purchases with a Visa® card or by check. Home equity lines of credit are often interest-only during the draw period, meaning your minimum payment will be only the interest on your balance each month. Keep in mind that you’ll pay off your balance much faster if you pay more than the minimum. After the draw period, which is usually 10 years, the balance is converted to a regular loan with a monthly payment schedule.
So if you need additional help paying for college, you may have more options than you think.