Why not use the equity in your home? Refinance at a low interest rate and take a cash payout to use for college. Several years ago this was recommended to us by a college financial planner. We followed his advice, refinanced at about a 3% interest rate and got a cash payout of about $140K which we are using to pay the college tuition.
bclintonk, I really like the idea of spreading it over 7 years. We definitely want to keep contributing to the retirement account, so that’s a good option to keep things manageable. We already have a HELOC with a crazy low interest rate, so can always use that to float if need be for a short time. I don’t want any long-term debt due to college expenses. Thank you!
I purchased my retirement home last year, this decreased my house payment by $1,000 per month, which I can now use to pay for college. I have also gotten raises over the years so I can afford a little bit more than that. That being said, why does college have to be paid off in 4 years, I figure if S takes out student loans I can help for a short time after he graduates and gets on his feet.
@MYOS1634. What is an LAC “downloader”?
I don’t know about California, but in some states you can basically run money through a 529 plan and save state income taxes not on the return on the 529 but on your earned income. There is a dollar cap on how much you can dump into a 529 of something like $70k and the 529 needs to be created several years before you begin withdrawing. Basically, 529’s were created and are intended for long-term college savings - not people in your situation. We worked the merit aid angle but I failed to have a heart-to-hear with D about how winnning big merit aid should influence her ultimate college selection. So if your child is academically strong enough to be awarded significant merit aid, discuss with them in advance how $25k or $30k in merit aid should influence their decision. D had to choose between Notre Dame at $60k net cost and GW, Kenyon or Case Western at $30k net cost. She chose Notre Dame - come April 1st it was a bit late for me to set down ground rules.