Once your two kids are out of the house you’ll probably want to downsize. So given that fact plus you mention having significant equity, I think a HELOC makes a lot of sense. Adjustable HELOCs are around 2% these days, IIRC. And with the way the global economy is going it’s highly doubtful interest rates are going to skyrocket in the next few years. Plus your HELOC interest is tax deductible. So I’d get the HELOC, or at least open one (you don’t need to borrow until you need it). Then just carry the loans until you sell and downsize in a few years and pay it off then. Or you can slowly pay it off over time.
Compared to pulling back on the 401k, it’s much cheaper. At 300k your marginal tax rate (fed plus California) is probably around 38%. So for every dollar you dial back from the 401k you take home 62 cents. Plus that 8% company match you mention makes it even less but doing that extra bit of math hurts my head.
We’re in a similar situation with no specific college savings account. But we have been putting money into stocks for quite a while as general savings, so we just sell off assets as needed. We also have a HELOC which I might dip into for the Fall 2015 bill as the market is down right now, then later I can sell some stocks to pay off the HELOC. Or not, as the HELOC rate is so low it’s practically a free loan.