When Soaring College Costs Hit Home

“Poverty is hereditary – it comes from your children.” 

Comedian Phyllis Diller may have been joking when she said that, but anyone who is raising a child today knows that there’s nothing inexpensive about having kids. In fact, according to a report from the U.S. Department of Agriculture, “it will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years.”

If that doesn’t shock you, consider an even more eye-opening fact: that figure doesn’t include one of the most expensive costs for parents – financing a college education. According to The College Board, an “in-state public college for the 2013–2014 academic year averaged $22,826 while a private college averaged $44,750.” In the last 30 years, college costs have quadrupled.

A shared burden

The burden of financing college education isn’t just falling on parents; today’s students are amassing significant debt.  As the infographic below shows, the average student graduates with nearly $25,000 in debt, giving them an uphill climb on the road to financial success.  The burden of this debt may be why they delay getting married and purchasing homes.

So how can parents help their children finance the costs of college and fill the gap where Financial Aid and other student loans leave off? One popular solution is actually close to home — home equity credit. With home equity, parents can borrow off the equity in their homes to pay for college costs, and take advantage of some very significant benefits, including:

• Lower rates than those available with private student loans.
• Potential tax savings.
• The ability to borrow and repay funds with a home equity line.
• Interest-only options to keep payments low.
• The flexibility to use funds to cover any educational expense — from books to computers to room and board and tuition.

Here to Help.

At DNB First, we have competitive home equity options, including a special  rate on a home equity line.  Stop by or call us today to learn more. Of course, as with any financial decision, it’s important to carefully weigh your options. After all, college is one of the biggest investments you will make as a parent, so you’d better do your homework.

Created by: TakeLessons

Author: Vince Liuzzi

I help Cleveland-area business owners do two things: buy businesses worth buying, and sell businesses at prices worth celebrating. I've been working in business brokerage and M&A with Transworld Business Advisors of Cleveland Metro long enough to know that this work is about more than transactions. Selling a business you've spent 20 years building is one of the most significant events of your professional life. Buying your first business is one of the most nerve-wracking. Both deserve someone in your corner who's been through it hundreds of times. I started this blog — Community Broker News and Views — because I got tired of watching business owners get surprised by things they didn't know they didn't know. The content here is original, it's practical, and it's built for Cleveland-area owners and buyers who want straight talk without the corporate fluff. **What I Do:** - Business valuations (complimentary, no-obligation) - Seller representation: valuation, preparation, listing, and closing - Buyer representation: search, evaluation, financing, and closing - Exit planning: helping owners prepare 1–3 years before they want to sell *Vince Liuzzi | Transworld Business Advisors of Cleveland Metro* *Serving Cleveland, Akron, and Northeast Ohio* View all posts by Vince Liuzzi