Creative College Financing-The HELOC and the 529 Plan

Since HELOCs are excellent tools for handling irregular expenses, it makes sense that lots of people are turning to them to provide additional cash for college. Usually a student applies for as much scholarship, grant or student loan money as he/she is eligible, then the parent will make up the difference, if needed, by accessing home equity with a HELOC. This arrangement works well for many reasons: 1) The HELOC allows the parent to pull out only as much money as needed at a time without having to borrow (and make payments on) a large lump sum; 2) As the payments are interest only for up to 15 years, repayment is easier on the parent