"Latest student aid? Kindness from strangers; Online loans supplement more traditional sources" by Angel Jennings, Globe Correspondent | August 3, 2008
Credit cards. Home equity loans. Retirement accounts.
Used to be, these options were last resorts for parents paying for their children's college tuition. Now, tapping into home equity, raiding a 401(k), maxing out Visas and MasterCards, and - the latest craze - borrowing online from strangers, have become more attractive as private student loans have gotten increasingly difficult and more expensive to get.
Where did all that bank bailout money go?
Remaining lenders are imposing more stringent standards, making it difficult to get a loan and more costly for those who do qualify.Please see: The College Loan Gamble
That has some students and parents scrambling to find other options to pay tuition. But financial aid analysts warn that doing things such as borrowing from 401(k)s or charging credit cards could put parents in a financial bind.
Easy for them to say.
Most experts agree it's wrong to use credit cards to fund a college education. Credit card companies often jack up interest rates if users miss even one payment - sometimes even if they're late paying on another credit card - and add stiff penalties on top of that.
The terms and higher interest rates also make using plastic one of the least attractive options. Raiding 401(k) retirement accounts could also be a poor option, even though it might seem like the next logical choice since it is money already saved. Most financial experts strongly warn against it.
Money withdrawn from a 401(k) is often heavily taxed. Borrowers sometimes pay up to 40 percent of the amount in taxes and early withdrawal penalties.
Why? It is MY MONEY!!!!
Why should Americans have to PAY PENALTIES for accessing YOUR MONEY?!?
I ALWAYS KNEW the "retirement" game was a FUCKING SCAM!!!!
In addition, the loan has to be paid with after-tax money, and again when the retiree cashes out, so the funds are taxed twice.
But it is MY MONEY, you fucking GOD-DAMN LOOTING BASTARDS!!!!!!!!!!!!!!
A growing alternative to using credit cards and tapping into retirement accounts is peer-to-peer lending websites. Financial experts say the sites, which facilitate strangers making loans to others, can be an alternative to raiding retirement accounts and running up credit card bills.
One downside to peer-to-peer lending is that the loans often are given piecemeal. Usually lenders offer only a fraction of the total amount of the loan requested, which means borrowers may wind up owing several lenders at a time.
Only one, huh?
Some parents may also think they're getting a deal by taking out a home equity line of credit to pay tuition. Homeowners have long relied on home equity loans to fund major financial purchases, so it's no surprise that parents are looking into them now, said Busanovich, the Woburn planner.
On the surface, home equity loans certainly seem like a great option: They have rates comparable with private loans and easy terms. But just like private loans, they are also less available. The shakeup in the housing market has caused home prices to go down, which means parents might not have enough equity in their home to borrow against. Or worse, if they do get a home equity loan, parents risk losing their homes.
"Parents think they need to sacrifice for their kids," said Simpson, the New Hampshire planner. "But they need to think about themselves."
FAR, FAR from the America I GREW UP IN!!
It TRULY IS AmeriKa now!!!
FUCK COMPASSION and FUCK YOUR KIDS -- you gotta look out for NUMBER ONE!!!!
Meanwhile, Busanovich said parents and students rarely explore one important alternative to private student loans - one that can ease the financial burden of college tuition.
"It doesn't have to be a $40,000-a-year school," she said. "There are good schools that cost less than private. And those are much better options."
Translation: Take that SHIT EJERKASHEN, average American, while ELITE RICHERS need not worry!!!!!!
--MORE--"
Also see: "If I Were A Terrorist"
