FAFSA Form & Financial Aid Form Blog

As you get ready to file your FAFSA this January, you or your family may be thinking about pulling out equity in your home to pay for college. This is a bad idea for several reasons:

* Mortgage and equity rates are highly variable and unlike student loans have no interest rate caps.
* Equity in your home is best reserved for critical emergencies or retirement.
* Equity used for financing education is not deductible on your taxes as part of education expenses.

Bottom line: file your FAFSA, nail down as many scholarships as you can, and make use of federal and private student loans to fund education. Tap home equity as a very last resort.