Finding out your teen has been accepted into the college of their dreams is one of the proudest and most emotional moments you’ll have as a parent. It shows your child is on their way to become an independent and self-sufficient adult, pursuing their own hopes and dreams. You’ll probably want to do everything you can to ensure your child’s education goes as smoothly as possible. Unfortunately, this can be easier said than done when it comes to finding financial support. The grants and relief efforts available from the government can only go so far, which means you may need to look into alternative options instead. If you’re struggling to find the cash for your child’s college dreams, the following options could offer a source of inspiration.
Use Your Retirement Savings
If you have some cash saved up in your retirement account, and you’re not too worried about your future finances, there is an option to tap into these funds to help pay for college. This is generally only option to parents under the age of 59 and a half who have their own IRA account. While you won’t face any penalties for early withdrawal, you might have to pay taxes on what you collect. This option unfortunately isn’t a solution if you have a 401k, but you may be able to get a loan within your 401k in some cases. It’s worth checking in with your account provider to see what kind of solutions might be accessible to you.
Take Out a Loan
Loans are generally the easiest way to find extra money for your child’s college expenses. There are various options out there beyond the standard student loans you might be familiar with. For some people, a private option like Earnest private student loans can be the most valuable solutions. These solutions give you a lot more freedom when it comes to choosing how much you want to apply for and when you’re going to pay back what you owe. The best way to make sure you’re getting the best deal with this strategy is to shop around and talk to loan providers about your options. That way, you can go in with a clear insight into what kind of borrowing is going to be best for you.
Try Home Equity
If you own your own home, you might be able to tap into the equity you can find there to assist your children in paying for college. Keep in mind, this can be a risky process, so it’s important to plan carefully and know exactly what you’re getting into. If equity does turn out to be an option for you, you can consider three different options for finding that much-needed cash. The first solution is a home equity line of credit, which uses the value of your home as a credit line. Usually, you can borrow up to 90% of the equity in your home, and you can borrow as and when you need to during the withdrawal period. Another option is to use a home equity loan, which uses the equity in your property as a loan collateral. You’ll need to be able to pay a certain amount back each month, similar to a mortgage. Alternatively, you can just try a remortgage.