Daily Record
March 12, 2006

Pay for college with a home-equity loan?
Should you borrow against your home to pay your children's college costs?


A mortgage lender in New York, Michael Moskowitz, CPA, president of Equity Now, says -- in general -- no.

Moskowitz grants that sometimes it works out.

An immigrant woman he knows, who cleans offices, managed to buy a house. Then she borrowed against it to send her two children through college -- and one on to medical school.

But Moskowitz would prefer that children get student loans.

"My philosophy is, they will then learn what life is about."

Still, he sees many parents obtain home-equity loans to pay their children's tuition and almost always, it's done at the last minute, without any planning.

"No parents talk to their kids about this," he complains. "No parent says, 'Look, when you're out of college and you have a good job, we may be short of money because we borrowed against our house. Will you help us out?'"

No parents ask their kids for financial assistance later on, even if they need it, he reports. "This help, unfortunately, is a one-way street."