Using Home Equity for College
How to pay for higher education using your home's equity
With college tuition and room and board charges rising at about twice the rate of inflation, and with most families' savings pools negatively affected by the difficult economic climate, many families are forced to be more creative about coming up with the funds to pay for their children's post-secondary education.
For many, this means obtaining private student loans from banks to cover educational costs over and above those covered by federally guaranteed student loans.
But for many families, the best option for closing the financial gap might be tapping into the equity in their home, and using a home equity loan for college expenses. Home equity is the difference between the fair market value of your home and what you owe on it. In other words, it's the portion of the total value in your house that you already own.
Most financial institutions offer both student loan and home equity options. They have distinct differences, such as home equity loans require that you own a home and have accrued equity that can be borrowed against.
Advantages of paying for college with a home equity loan from Charter One:
- Proceeds from a home equity line of credit are not considered 'income', so are not reported as an asset
- The loan amount is limited only by the amount of equity in the applicant's home, their debt-to-income ratio and credit-worthiness
- Home equity loans may qualify you for tax breaks, since in many cases the interest you pay is tax-deductible (check with your tax advisor first)
Apply for a home equity loan and get on the road to financing your child's college education.
Learn about other financing options for your child's education
If home equity loans for college are not right for your family, Charter One has another option—the TruFit Student Loan™—a private education loan. If you have questions about how a student loan can help with college financing, call a student loan specialist at 1-800-721-3969, and we'll help walk you through the process.
Additional student loan and college planning resources
- Impact of Multiple Kids in College at Once
- Advantages of Cosigning a Student Loan
- Planning for Your Child's Education
- Investment in an Education