With the skyrocketing cost of college tuition, many parents are turning to an equity loan to finance their childrens college education. Even those parents who have frugally done without for many years in order to put money aside for college are finding themselves at the short end of the stick when it comes time for that day. The reason for this is that college tuition has risen at an alarming rate, and unless you were fortunate enough to invest in a special program for college education (529 Plan in the United States), you will need additional funding. Scholarships Certainly, for the parent who has a student who did meticulous work throughout high school and qualifies for a full scholarship to the college of his or her choice, an equity loan is not an issue. However, for the majority of parents, the best they can hope to receive is a partial scholarship. It isnt because their student is not bright nor does it mean their student didnt receive high enough grades. The reality is that scholarships are so under-funded that only the top scholastic achievers can hope to be a lucky recipient. Unless your student maintains an almost perfect grade point average, you are probably going to have to put out a substantial amount of cash during his or her college years. Loans and Grants Although another good source of funding for college tuition, not every student is going to qualify. Even many loans are based on need, which takes into account the income of the parents for unmarried students. If the student is from a two-income family and the offspring of a company executive, the chances of qualification are virtually non-existent. Very little consideration is given to the fact that other children are still at home and in need of financial support. The last alternative When all scholarships have been received, loans and grants applied for and exhausted, and all monies previously set aside for college have been utilized, an equity loan is the remaining source of funding. For this type of financial need, a line of credit would serve the purpose better than an actual loan since funding would be due on a recurring semester basis rather than in one lump sum. This would allow the parents of the student to advance funds as needed for tuition, books, school supplies, personal needs, and spending money. Unlike an equity loan, you would not have to be concerned with taking more money than is needed in case tuition or books go up in price during the time your student is enrolled, a distinct possibility. Summary College education is expensive and necessary, and unless you have been fortunate enough to save enough funds to finance this important part of your students life, an equity loan is going to be your only means to finance it. Before you take that step, ascertain that all other avenues have first been utilized so that you dont exhaust all of your equity in sending your children to college. You may freely reprint this article provided the following author's biography (including the live URL link) remains intact: About The Author |
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