Copied and Pasted by:Jeffrey Kam
Here’s another reminder of how the housing market collapse has spread its ugly tentacles into just about every corner of our lives.
Parents of college age children, already worried about their job security amid the recession, are also finding that the traditional piggy bank often used to pay tuition bills is just about empty, a recent New York Times article points out.Taking out a home equity line or second mortgage to help pay your kids college education is as American as apple pie.
Long before the current housing market boom my father was doing just that to help put three children through college.
But with home values having fallen off a cliff, many homeowners now find themselves underwater, with no equity at all to tap.
Banks are also balking at granting second mortgages, even when there is plenty of equity to back them up, to those with credit records that are less than perfect or whose pay is heavily reliant on commissions or bonuses, the article notes.
Colleges are now scrambling to adjust, with many, for now, having to lobby for other forms of aid for students whose parents are suddenly house poor.