Reply to Paying for and saving for college

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[quote=Anonymous][quote=Anonymous]What is wrong with borrowing against home equity for college expenses?  Student loans have higher variable rate and can’t be discharged in bankruptcy? Sure it’s better to not borrow at all but if you need cash flow, why is home equity not the best option?[/quote]

No. For the same reason you should not pull money from retirement accounts to fund college. If income was insufficient to save for or cash flow college then it will not be sufficient to be able to pay off HELOC. Increasing the mortgage puts retirement in jeopardy. A student has decades to pay off loans, or can choose less expensive schools that require less debt. Parents with college age kids have much less time to pay off a mortgage. I'd suggest also that you are crazy for suggesting that parents should borrow money against a primary residence with a view to "just filing for bankruptcy" in the shadow or retirement. Once they lose the house, where are those parents going to live? Whatever it is better be cash and not require credit because your brilliant financial master plan is...bankruptcy??? [/quote]

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