PLUS Loan, 2nd Mortgage, H.E. Credit Line

<p>HELOCs could be out of the equation at this time:</p>

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<p>What is the financial planner's advice?</p>

<p>Nightengale - As BunsenBurner said, there's no simple answer. And as Columbia_Student says, it's often hard to understand "why?" even after you've paid a few years. (I don't understand even a third of categories on the Form 6251, even after filling it out for several years!) Each family's situation is different. For mine the AMT calculation is a comparatively simple(AdjustedGrossIncome minus AMT Allowance minus CharitableContributions minus MortgageInterest)*26%. YMMV.</p>

<p>Well, the HELOC option has been closed down for least temporarily.</p>

<p>thisoldman, did you mean that if you die when you have a Plus loan, they can go after your assets? This says differently on sites I've gone on:</p>

<p>If the student for whom the parent obtains a Parent PLUS loan dies, the Department of Education will repay the loan, along with any outstanding interest, thereby satisfying the parent's obligation. If the parent borrower dies or become totally and permanently disabled, the loan will also be repaid in full. If the other natural parent is a cosigner on a Federal Parent PLUS Loan, the death of the parent borrower does not release the obligation of the cosigner to repay the loan.</p>

<p>I don't like to think about death, (although I'll be old when these loans are done) but I've never seen anything that said assets would be attached.</p>

<p>Each situation does vary, but I (an admitted fiscal conservative) would not eat up virtually all my home equity paying for one child's college tuition. If I couldn't pay more of it as we go, I'd shop for a cheaper alternative. The equity is stated as of today, and it's possible you couldn't even sell the house to pay off the loan at the end of four years. And if you did, where would you live? Can you afford to make the increased payments for the 10 or 15 year life of the HELOC loan? </p>

<p>Oldest has just graduated and took out the maximum Stafford loan. No other debt is owing for his undergrad years. It took luck and discipline. </p>

<p>Are there other children or dependents to be provided for? Eating up the equity for an undergrad degree leaves no room to help with grad school or other choices later in life (for both the student and the parent). What if the student changes majors and requires a fifth year of study? Would they then have to drop out of College A to find a cheaper alternative (state school)? </p>

<p>We all like to think our kids are rock solid, know what they want, unwavering in their dedication but they are children. Past performance is not a guarantee of future performance (like the prospectus says) and stuff happens in life. You might be willing to bet the house on a four year degree -how would you feel if that four year degree doesn't materialize?</p>

<p>"You might be willing to bet the house on a four year degree -how would you feel if that four year degree doesn't materialize?"</p>

<p>Another thread poses the question 'Why do today's parents put so much energy into their children's education.' Lefthandofdog has asked the same question much more succinctly.</p>

<p>I'm sure the answer is highly personal, but here's one take. My parents were children of the Depression. Most in their generation had N-O-T-H-I-N-G. My parent's ambitions for their children was to feed them, cloth them, house them, teach them the value of hard work, and educate them. Today the first three are pretty well covered for all. What does that leave?</p>